Official Funding Circle Forum, Moribund or Terminally ill?

You have got it bang on the nose. It would not take the press long to realise there was a problem worth investigating and could create adverse publicity for FC which I am sure they would not welcome.

Beyond all this there is of course a recourse to lodge a formal complaint against FC with the FCA. This would likely be welcomed by FC like a hole in the head as they are already in the middle of reorganising (See last months FC Newsletter) in order to come into line with the new FCA rules for P2P lending. As it is said, there are many ways to skin a cat. So take your pick.

I had an interesting thought experiment a couple of weeks ago comparing P2P with mortgage securitisation. Loan originator has limited skin in the game (retained portions + reputation vs servicing fee + reputation). Ultimate lenders have restricted visibility of borrower fundamentals (aggregated loans + model assumptions vs borrower confidentiality). Limited lender sophistication (innovative product vs personal investors). I'm sure there are other aspects you could draw out, just as there are also material differences.

I have no doubt that a lot of people will do well out of P2P (borrowers, lenders and intermediaries), and I continue to invest, but caveat emptor applies and all 3 parties have distinct incentives.

Woah, not so fast, sonny Jim, it seems they aren't going to let us dump them unless the nice law man pays up in March as well.

Good luck with flogging them off if they're significantly below MBR. I've had a small sub 9.5% Band C loan part for sale at 0% markup for almost two weeks now, with no autobid bite. I think there's a strong possibility that FC have made some autobid configuration changes to stop it picking up "at par" secondary market loan parts at significantly below MBR due to the dumping/swapping into higher rate loans by longer term platform users that began to take place in late January.

I have no proof of this; it is conjecture on my part. However, if I'm right and you hold loan parts at sub-MBR, you're not going to be able to readily offload them onto autobidders anymore...

Hmmmm, strange. Wonder why mine is not shifting. Will try relisting it...

Agreed Markr that some will go and some will not. FC may have the ability to limit the attention that Autobid pays to the secondary market, but not to interfere with the interest rate settings made by Autobidders as Jimbo seems to imply.
I sell my C- before the fourth repayment, just to avoid defaults, and so yesterday evening I put a few hundred pounds of loan parts in each of four C- loans up for sale, in parts of ex £40 or £60. These were all at par at 11.5%, while MBR is now 11.6%. These used to go at a premium but no longer. On logging on this morning three autobidders (presumably) had each taken one part of each, in three groups of four parts. Two of these autobidders were dated yesterday, late at night, and one today was early this morning, though we have no time stamp. But nothing since. I think this shows that Autobid does run on the secondary market occasionally, but I do suspect that the repayments to autobidders are aimed at the new loans mostly. That large A loan closing in 8 days time has now collected £94K at 7.9%, while smaller A loans closing today are at marginal rates of over 12%, so all that autobidder ballast cash is really needed to produce anything like an acceptable average rate on loans of 100k up.
Meanwhile I am trying to monitor the number of unsold loan parts at par or a discount around noon on a daily basis and this number has crept up from around 5000 at the start of last week to 7000 at the end of this. So cash is still very short for new loans and marginal rates even higher, which of course encourages us to churn our holdings, which in turn encourages FC to avoid the secondary market for Autobid, if they can.