merlin
Minor shareholder in Assetz and many other companies.
Posts: 902 
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Post by merlin on May 7, 2015 11:01:43 GMT
Of course the Charlie I am talking about is Charles Ponzi. So which of the current offerings in the P2P or P2B market is in fact a Ponzi? I cannot believe that despite the so called controls operated by the FCA at least one or more of the current providers is not in reality a giant scam. Don't be tempted to name real names but just get a bit inventive as we have done in the past. It would also be interesting to know how would you spot one?
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webwiz
Posts: 1,133
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Post by webwiz on May 7, 2015 11:20:32 GMT
Any scheme in which more money is pouring in than is being paid out is at risk of becoming a Ponzi. This applies to all novel investment mechanisms and lasts until maturity when cash outgoings are comparable to incomings. Most if not all Ponzi schemes did not start out to defraud, but yielded to the temptation of making interest payments out of new money when needed. I am afraid that every single p2p/p2b is at risk, some more so than others. Our only defence is the useless FCA, which only ever seems to respond to failure rather than preventing it.
BTW although the term Ponzi has stuck and become common currency, Charlie was far from the first practitioner. I would prefer the term Merdle scheme myself but it is not going to happen.
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Post by Deleted on May 7, 2015 16:18:50 GMT
I know which one worries me.
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Post by westonkevRS on May 7, 2015 17:36:54 GMT
I know my name was mentioned in jest, but it's true that there is certainly platform risk out there. I've got my personal "favourites" for a possible exit in 2015 as well as some tiny platforms. I just hope it's orderly as it was for Encash/Yes Secure and Gradurates. For RateSetter obviously you can get our audited accounts from Companies House under Retail Money Market Ltd. As well as details on the trust that holds the Provision Fund. Also if we were a Ponzi scheme, the "suckers" would include Charles Peel and Neil Woodford: www.telegraph.co.uk/finance/newsbysector/banksandfinance/11503152/Neil-Woodford-ditches-banks-for-peer-to-peer-lending.htmlThat said, maybe I'm actually Rhydian! If we were a dodgy scheme the answers above might be exactly the same! You can always visit the office for yourselves, lenders are always welcome to "peer" their head around the corner to see the bricks and mortar. @ westonkevRS |
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Grezza
Member of DD Central
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Post by Grezza on May 7, 2015 17:48:27 GMT
If we were a dodgy scheme the answers above might be exactly the same! You can always visit the office for yourselves, lenders are always welcome to "peer" their head around the corner to see the bricks and mortar. Aaaaaaaaaah, yes, and the ratesetter corporate mug is the clincher!! 
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Post by ablrateandy on May 7, 2015 19:19:04 GMT
Without a word of a lie, there is a platform out there who actually have in their marketing blurb on a video a statement that cites the definition of a Ponzi Scheme and uses it as a positive point...
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blender
Member of DD Central
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Post by blender on May 7, 2015 20:26:55 GMT
There's a couple I am worried about:
PoundoFlesh - which claims to have the best collections and recoveries team, and
UtheUsurer - which claims it offers the best deal for lenders.
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kermie
Member of DD Central
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Post by kermie on May 7, 2015 20:41:08 GMT
There's a couple I am worried about: PoundoFlesh - which claims to have the best collections and recoveries team, and UtheUsurer - which claims it offers the best deal for lenders. It is either a mark of my stupidity, or a mark of how daft some new dot-com-altfi-aren't-we-cool-kids company names can get, that I actually googled those two. Doh.
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Post by bracknellboy on May 7, 2015 20:49:53 GMT
That's sufficiently cryptic that I for one haven't got a clue who you are referring to.
Worth making a point here before things get out of hand. Perfectly reasonable to state reasons why in your opinion a platform might fail. However the starting point of the thread is a little unfortunate since there is a potential implication that subsequent posts are claiming that any mentioned platforms - masked or otherwise - are operating fraudulently. It would be a good thing to ensure that posts make clear that they are not suggesting any such behaviour, but rather that there are concerns - with argued reasons why - concerning the viability of a platform's business model.
Mods would like a quiet weekend.
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blender
Member of DD Central
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Post by blender on May 7, 2015 22:36:48 GMT
Cryptic? Totally imaginary! Sorry Kermie. A silly mee-too name, a supposed USP, a cheap website and you can start collecting cash. Lenders are essential, borrowers optional.
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upland
Member of DD Central
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Post by upland on May 8, 2015 7:50:38 GMT
Good thread , this sort of thing worries me. Its only a question of time before something bad for the newly emerging industry happens. I do find some of these smaller companies offering high rates and with small deal flows a bit of concern. I dont know how they can offer so much when others do not.
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merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
Likes: 302
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Post by merlin on May 8, 2015 17:32:57 GMT
Personally I get a bit worried when the principal's of investment companies are domiciled outside the UK and particularly in places like the Cayman Islands, Hong Kong, etc. Not much chance of getting back your hard earned dosh id these type of birds choose to simply fly away!
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bugs4me
Member of DD Central
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Post by bugs4me on May 8, 2015 18:25:59 GMT
Good thread , this sort of thing worries me. Its only a question of time before something bad for the newly emerging industry happens. I do find some of these smaller companies offering high rates and with small deal flows a bit of concern. I dont know how they can offer so much when others do not. Always do your own DD on the individuals behind the platform before bothering to do any DD on what they are offering.
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webwiz
Posts: 1,133
Likes: 210
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Post by webwiz on May 9, 2015 16:29:49 GMT
Good thread , this sort of thing worries me. Its only a question of time before something bad for the newly emerging industry happens. I do find some of these smaller companies offering high rates and with small deal flows a bit of concern. I dont know how they can offer so much when others do not. Always do your own DD on the individuals behind the platform before bothering to do any DD on what they are offering. You don't think we can rely on the FCA to do even that? They should have more resources than we do.
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bugs4me
Member of DD Central
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Post by bugs4me on May 9, 2015 16:40:01 GMT
Always do your own DD on the individuals behind the platform before bothering to do any DD on what they are offering. You don't think we can rely on the FCA to do even that? They should have more resources than we do. Definitely not. Each individual that wishes to be registered within an authorised firm needs to pass a fit and proper person 'test'. All sounds good until you ask the FCA what their definition is of a 'fit and proper' person and they cannot give you one. No doubt if you had a holiday at Her Majesties Pleasure for financial fraud then that may go against you but if you've got a not very healthy track record of failed company directorships, maybe a couple of IVA's and a string of unsettled creditors then you're probably okay. The FCA, like their predecessor the FSA, are reactive rather than proactive and whilst it's okay for them to possibly fine a firm or an individual several thousands and possibly suspend them for a while from the financial services sector it doesn't help lenders/investors get their funds back.
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