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Post by bob2010 on Mar 1, 2023 17:26:46 GMT
Can you expand on that please? Because they would be hit by the liquidators fees. Won't look good to institutional investors. 2.4% payout this month is daylight robbery. I wonder how long it'll take for the Financial Ombudsman to start investigating.
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rscal
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Post by rscal on Mar 1, 2023 18:58:07 GMT
Because they would be hit by the liquidators fees. Won't look good to institutional investors. 2.4% payout this month is daylight robbery. I wonder how long it'll take for the Financial Ombudsman to start investigating. I checked their timescales it seems it is around 6 months just to get allocated and 3 months (probably first stage) time to review so we're looking at 9 months for a preliminary outcome.
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Post by bob2010 on Mar 1, 2023 21:10:58 GMT
Because they would be hit by the liquidators fees. Won't look good to institutional investors. 2.4% payout this month is daylight robbery. I wonder how long it'll take for the Financial Ombudsman to start investigating. I checked their timescales it seems it is around 6 months just to get allocated and 3 months (probably first stage) time to review so we're looking at 9 months for a preliminary outcome. Thanks. I wonder whether 'financial hardship' can be used to expedite the claim as our cash/capital is effectively locked up. I'll give them a call in the morning to see if anything can be done.
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alanh
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Post by alanh on Mar 2, 2023 18:17:55 GMT
The complaints about the small investor bailout probably took a similar timescale but they nearly drowned under these so I'm not sure if that would make it faster or slower to investigate. The other difference is that AC had already caved in and reversed their decision by the time the investigator spoke to me so maybe the FOS were able to put a lower priority on it, meaning that any complaints should be addressed a bit quicker this time round as the issue is ongoing.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 2, 2023 19:33:51 GMT
The complaints about the small investor bailout probably took a similar timescale but they nearly drowned under these so I'm not sure if that would make it faster or slower to investigate. The other difference is that AC had already caved in and reversed their decision by the time the investigator spoke to me so maybe the FOS were able to put a lower priority on it, meaning that any complaints should be addressed a bit quicker this time round as the issue is ongoing. Struggling to see any evidence of them drowning under P2P complaints ... the stats published by FOS show that complaints from borrowers were far more prevalent than complaints from lenders which dont ever seem to have got above the teens. Is there some other source? I note that the one published ruling rejected the complaint
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alanh
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Post by alanh on Mar 2, 2023 20:37:40 GMT
Thats from the conversation I had with the FOS guy. As I said it was after they had U-turned on the idea so was kind of pointless but we did have a chat and I was pretty surprised at how much detail he knew about the whole thing. He said it was something the FOS was "very aware" of and when I asked if they had had a lot of complaints he said yes. This guy would have needed to have done a fair amount of work to understand the intricate detail of how the accounts worked and hence the illogical nature of the flat rate payout system and he's not going to be doing all that for no reason. I've not looked at the FOS complaint stats so can't comment but maybe mine and many others don't even count as they were effectively opened after the event. Who knows. One things for sure though - the FOS were all over it.
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Post by bob2010 on Mar 3, 2023 9:12:28 GMT
I don't see how the Financial Ombudsman would not uphold this complaint:
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Post by giammy on Mar 4, 2023 17:08:34 GMT
Thank you for this 11 pages of discussion. Would it be possible guys for you to share a consolidated complaint template that all of us should send to Assetz first and then to the Financial Ombudsman?
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SteveK
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Post by SteveK on Mar 4, 2023 18:47:25 GMT
Is Assetz retail closure due to the following statement
So lenders, enticed by quick access to their money, didn't see that the positive was a potential negative! Did anybody see the potential consequences of that?
What other P2P companies, allowing quick return of funds, may be in the same boat or do they manage it differently?
What are the lessons for the future?
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alender
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Post by alender on Mar 4, 2023 20:31:03 GMT
Is Assetz retail closure due to the following statement
So lenders, enticed by quick access to their money, didn't see that the positive was a potential negative! Did anybody see the potential consequences of that?
What other P2P companies, allowing quick return of funds, may be in the same boat or do they manage it differently?
What are the lessons for the future?
This is something I have been warning of for a long time in that AC AAs are worse than the Northern Rock model as not only are the funds let out for much longer terms than the access terms on the AAs but with the added problem of the committed future tranches which have to be funded from these accounts. The worst part of this is AC never told investors of the risks due to the extent of these tranches pose and the amount AC had committed lenders future payments. The other large flaw is these accounts only work in a falling or stable interest rate environment, once rates elsewhere rise above the AAs for similar risk or approach for lower risk investments it is obvious funds will exit the accounts and soon a lock in will occur due to lack of cash for withdrawals. AC call this abnormal market conditions, I call rising interest rates a normal market condition. These tranches are only mentioned in the small print and no mention of risks posed by the market acting in a normal way (rising interest rates), IMO as these are both significant risks and as such should have been clearly stated. In the past AC chose when to fund these tranches from the AAs and when to fund them from other sources more lucrative for AC, if no other sources are available they will come from the AAs making the AAs a lender of last resort even though these loans are often split between the AAs and other lenders, i.e. AA lenders are funding future tranches for other lenders loans. From FCA Spot a misleading financial promotion Financial promotions can be unfair, unclear or misleading for many reasons. Here are some questions to help you spot and avoid the misleading ones. What are the risks to my money and are they clear?
' ' How long do I have to commit for?
. . Is there important information that only appears in the small print?
There are other places the FCA mentions small print. IMO if the FCA was upto the task it would have in made sure these risk are clearly stated, however they could well be the basis of a complaint to the FOM. The lesions for the future are the AAs are basically a flawed product and IMO AC cannot be trusted.
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Post by df on Mar 4, 2023 20:32:39 GMT
Is Assetz retail closure due to the following statement
So lenders, enticed by quick access to their money, didn't see that the positive was a potential negative! Did anybody see the potential consequences of that?
What other P2P companies, allowing quick return of funds, may be in the same boat or do they manage it differently?
What are the lessons for the future? Many did and still do allow quick access, either through secondary market or purposely designed products. Zopa and Ratesetter QA accounts ended well for investors, Loanpad seems to be functioning fine. I guess the quality of design and management are the key features. I liked AC's QAA, it was great for funds in waiting, particularly when uninvested cash was automatically swept into it. Out of AAs I mainly used 90DAA, the rate was very competitive for what it was and I kept cancelling my scheduled withdrawals. The first sign of potential consequences for me was when AC introduced "abnormal market conditions", the cash was locked and "lender membership" fee was introduced . Later large proportion of AA's was "forcefully" returned (I was very happy about it, but I recall some investors complaining)... at that point I didn't need any more signs and got out of AAs. One of the lessons for the future is to get out at first sign when the product starts showing unsteady behaviour. Can always come back to it if it was a false alarm.
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bugs4me
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Post by bugs4me on Mar 5, 2023 11:02:38 GMT
Many did and still do allow quick access, either through secondary market or purposely designed products. Zopa and Ratesetter QA accounts ended well for investors, Loanpad seems to be functioning fine. I guess the quality of design and management are the key features. I liked AC's QAA, it was great for funds in waiting, particularly when uninvested cash was automatically swept into it. Out of AAs I mainly used 90DAA, the rate was very competitive for what it was and I kept cancelling my scheduled withdrawals. The first sign of potential consequences for me was when AC introduced "abnormal market conditions", the cash was locked and "lender membership" fee was introduced . Later large proportion of AA's was "forcefully" returned (I was very happy about it, but I recall some investors complaining)... at that point I didn't need any more signs and got out of AAs. One of the lessons for the future is to get out at first sign when the product starts showing unsteady behaviour. Can always come back to it if it was a false alarm. Me being pedantic but in my book it's not just 'when the product starts showing unsteady behaviour' but when when the company starts showing unsteady behaviour and there have been several instances of this over the past 2-4 years.
On another point, the lender fee or service fee whatever folks choose to call it is not 2.8%. If by way of example the AA's are 'promised' a return of say 5% then that 2.8% charge represents a 56% reduction. Rather like when the budget is announced in the HoC the Chancellor of the day announces a 1% increase on National Insurance going from 10% to 11%. Nope, it's a 10% hike in my book so please stop playing down the impact.
Anyway, I'm fortunately out of AC but do feel a sense of sympathy towards those still forcibly locked in the cells!!!
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Post by bob2010 on Mar 5, 2023 15:52:39 GMT
If the FO rules that AC are in breach of the terms and conditions, could they be forced to repay capital or is just a refund of the interest charges? It's my understanding that it should be latter, as from theirs T&Cs their investors should have had the option to reject their fee proposal and the only way of doing so would be to close the account and withdraw the capital.
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rscal
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Post by rscal on Mar 5, 2023 17:04:15 GMT
If the FO rules that AC are in breach of the terms and conditions, could they be forced to repay capital or is just a refund of the interest charges? It's my understanding that it should be latter, as from theirs T&Cs their investors should have had the option to reject their fee proposal and the only way of doing so would be to close the account and withdraw the capital. By 'capital' are you thinking about funded development tranches in which lenders' capital is diverted and upon which the borrowers pay interest - but not to the underlying investors? I think that would be above their paygrade to determine as it would be scarcely calculable - whereas fees charged are express and therefore directly applicable. But it is something a nominal amount of compensation could awarded for under the 'time and trouble' rubric perhaps. The trouble imputable being you could have taken the repayments and earned interest on them elsewhere. [say £100?] Awards are possibly tax free [who knows?]
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Post by bob2010 on Mar 5, 2023 19:55:03 GMT
If the FO rules that AC are in breach of the terms and conditions, could they be forced to repay capital or is just a refund of the interest charges? It's my understanding that it should be latter, as from theirs T&Cs their investors should have had the option to reject their fee proposal and the only way of doing so would be to close the account and withdraw the capital. By 'capital' are you thinking about funded development tranches in which lenders' capital is diverted and upon which the borrowers pay interest - but not to the underlying investors? I think that would be above their paygrade to determine as it would be scarcely calculable - whereas fees charged are express and therefore directly applicable. But it is something a nominal amount of compensation could awarded for under the 'time and trouble' rubric perhaps. The trouble imputable being you could have taken the repayments and earned interest on them elsewhere. [say £100?] Awards are possibly tax free [who knows?] I invested my money in an Instant Access Account with the expectation that I could withdraw it at any time. Although AC may argue that the unusual market conditions can justify their refusal in allowing the withdrawal, it contradicts the option to decline the new fees. Closing my account and withdrawing all my funds would have been the obvious solution. However, since I have not been able to withdraw my investment, my cash is now at risk of default during the 'run-off' period . If my complaint were to be upheld, the compensation I receive should consider this additional risk to my investment.
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