james
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Post by james on Sept 3, 2015 19:15:15 GMT
I'm going to reduce my investments on SS. Looking at my investments they aren't very well diversified. I've got quite a lot of money in a few loans. I wasn't too bothered before because I understood I was lending to Lendy rather than to individual borrowers. Now it looks like if 1 of my loans goes bad I've got a problem with quite a lot at risk. I've had a few defaults on another P2P platform but that was small amounts in micro loans. On SS have quite a lot in not many loans. Why reduce? Your existing lending was done under the old T&C and Lendy Ltd can't just go in and change past contracts without your agreement, so I assume that if you ask, Lendy will confirm that the old terms continue to apply to the existing loans, at a minimum until they are resold.
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ilmoro
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'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 Sept 3, 2015 19:54:00 GMT
I'm going to reduce my investments on SS. Looking at my investments they aren't very well diversified. I've got quite a lot of money in a few loans. I wasn't too bothered before because I understood I was lending to Lendy rather than to individual borrowers. Now it looks like if 1 of my loans goes bad I've got a problem with quite a lot at risk. I've had a few defaults on another P2P platform but that was small amounts in micro loans. On SS have quite a lot in not many loans. Why reduce? Your existing lending was done under the old T&C and Lendy Ltd can't just go in and change past contracts without your agreement, so I assume that if you ask, Lendy will confirm that the old terms continue to apply to the existing loans, at a minimum until they are resold. Why not? As long as they offer you a chance to recover your cash. Mobile phone companies are constantly changing contracts without consent, you have the right to reject it and leave as long as you pay off any money owing (ie remaining cost of 'free/reduced' phone) Banks change T&Cs all the time, again if you object you leave. Not saying SS will but I dont see anything to stop them. {Clause 23 (new TCs - right to amend without agreement}
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james
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Post by james on Sept 3, 2015 20:35:54 GMT
Why reduce? Your existing lending was done under the old T&C and Lendy Ltd can't just go in and change past contracts without your agreement, so I assume that if you ask, Lendy will confirm that the old terms continue to apply to the existing loans, at a minimum until they are resold. Why not? As long as they offer you a chance to recover your cash. Mobile phone companies are constantly changing contracts without consent, you have the right to reject it and leave as long as you pay off any money owing (ie remaining cost of 'free/reduced' phone) Banks change T&Cs all the time, again if you object you leave. Not saying SS will but I dont see anything to stop them. {Clause 23 (new TCs - right to amend without agreement} At a minimum the FCA's treating customers fairly requirement. A person with undiversified holdings would suffer a severe concentration of risk if their loans were switched to the new model, a risk that they didn't have under the structure at the time the loans were made. Risk level changing is one of the things that the FCA is quite sensitive about. A right to amend without agreement is an inherently unfair term in a consumer contract unless the circumstances under which it is permitted are enumerated specifically, not generally. Consider the impact of a borrower amending their contract without agreement of the lender to remove their security. Obviously unacceptable for a borrower to do that. Yet that's what you're suggesting you think Lendy could do, as the borrower from the people making the investments. That FCA unfair terms page has a link for reporting unfair terms. If Lendy was to use a contract term to remove security I assume that at least one investor who would see a negative change in risk level would complain about the term Lendy used to justify being able to do so. Though I suspect that just complaining to Lendy would resolve the matter, since I don't really think that Lendy can possibly believe that it would be OK.
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Post by solicitorious on Sept 3, 2015 20:54:54 GMT
My understanding, based on a private conversation some weeks ago, is that it will apply to existing loans.
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james
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Post by james on Sept 3, 2015 20:56:37 GMT
My understanding, based on a private conversation some weeks ago, is that it will apply to existing loans. Then things may get quite interesting if a loss in excess of at under the current terms results, since I assume that whoever suffers the loss will both take Lendy to the FOS and complain to the FCA about being stripped of their security. If they haven't complained already.
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Post by pepperpot on Sept 3, 2015 21:15:16 GMT
There wasn't any security. Technically it was an unsecured loan to Lendy for the purposes of secured lending, we were just notionally allocated parts of the loan pot. If people under to old system are not happy with the change in structure it would take about 5 mins to opt/sell out. (If any one does, could they post here just before doing so) By holding onto parts you are in effect accepting the new structure.
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ilmoro
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'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 Sept 3, 2015 21:17:07 GMT
My understanding, based on a private conversation some weeks ago, is that it will apply to existing loans. Then things may get quite interesting if a loss in excess of at under the current terms results, since I assume that whoever suffers the loss will both take Lendy to the FOS and complain to the FCA about being stripped of their security. If they haven't complained already. While I dont disagree with the logic of what your saying it doesnt seem to square with what their new T&Cs say (and I assume the old contains similar) and most financial organisations who are constantly varying T&Cs. As long as SS offered the option for lenders to withdraw (which the SM potentially does, though SS may have to pick up the slack in event of liquidity issues) at no cost/risk. By continuing to use the website you are accepting the new T&Cs. Cant say I have much confidence in the FCA, (or predecessors) always late to the party and usually after the horse has bolted. Edit: Wouldnt come to a loss, the first interest payment on an overdue loan where the borrower doesnt remit funds and the payment wouldnt be made so lenders could argue they were out of pocket as a result of the new T&Cs as SS wouldnt cover it, it would accrue.
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james
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Post by james on Sept 3, 2015 21:38:50 GMT
There wasn't any security. Technically it was an unsecured loan to Lendy for the purposes of secured lending, we were just notionally allocated parts of the loan pot. If people under to old system are not happy with the change in structure it would take about 5 mins to opt/sell out. (If any one does, could they post here just before doing so) By holding onto parts you are in effect accepting the new structure. Requiring a person to sell existing investments to avoid a change in terms for those investments also seems like a breach of TCF obligations as well as the contract. I don't think that the contracts give Lendy the right to repay such portions of a loan either, that's for the borrower, though maybe I missed something, so Lendy doesn't seem able to dodge its existing security undertakings by repaying and relisting. Voluntary relending under the new terms does seem like a sensible thing for Lendy to do, if they do want as much money as possible switched. I assume that those with well diversified sets of loans would want the new terms while those with poorly diversified holdings would want the old ones, the security of which is what persuaded them to make those concentrated loans in the first place. Personally I also assume that Lendy was mostly focussing on the good news aspect and may not have given enough attention to the people who are detrimentally affected by the change and it might just be not recognising something that they would have recognised if they had thought a bit more about it during the excitement of a mostly beneficial change. That is, I don't think there was any malice, just oversight that they will find some solution for.
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ilmoro
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'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 Sept 3, 2015 21:54:59 GMT
There wasn't any security. Technically it was an unsecured loan to Lendy for the purposes of secured lending, we were just notionally allocated parts of the loan pot. If people under to old system are not happy with the change in structure it would take about 5 mins to opt/sell out. (If any one does, could they post here just before doing so) By holding onto parts you are in effect accepting the new structure. Requiring a person to sell existing investments to avoid a change in terms for those investments also seems like a breach of TCF obligations as well as the contract. I don't think that the contracts give Lendy the right to repay such portions of a loan either, that's for the borrower, though maybe I missed something, so Lendy doesn't seem able to dodge its existing security obligations by repaying and relisting. Voluntary relending under the new terms does seem like a sensible thing for Lendy to do, if they do want as much money as possible switched. I assume that those with well diversified sets of loans would want the new terms while those with poorly diversified holdings would want the old ones, the security of which is what persuaded them to make those concentrated loans in the first place. Personally, a detrimental change to existing security/protection arrangements that is as substantial as this would cause me to shift Lendy to a "not recommended, untrustworthy platform" list and describe it in that way whenever I list platforms. Forced sales and/or removal of protection for existing loans are big deals. While purely voluntary would be completely trouble-free. Perhaps it should be pointed out that as far as Im aware the existing terms and conditions (currently displayed on the site) are considerably different to what everybody probably thinks they are as they havent been amended since SS started lending on boats, no monthly interest, no guarantee on interest or capital repayment etc.
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Post by pepperpot on Sept 3, 2015 22:10:35 GMT
There wasn't any security. Technically it was an unsecured loan to Lendy for the purposes of secured lending, we were just notionally allocated parts of the loan pot. If people under to old system are not happy with the change in structure it would take about 5 mins to opt/sell out. (If any one does, could they post here just before doing so) By holding onto parts you are in effect accepting the new structure. Requiring a person to sell existing investments to avoid a change in terms for those investments also seems like a breach of TCF obligations as well as the contract. I don't think that the contracts give Lendy the right to repay such portions of a loan either, that's for the borrower, though maybe I missed something, so Lendy doesn't seem able to dodge its existing security undertakings by repaying and relisting. Voluntary relending under the new terms does seem like a sensible thing for Lendy to do, if they do want as much money as possible switched. I assume that those with well diversified sets of loans would want the new terms while those with poorly diversified holdings would want the old ones, the security of which is what persuaded them to make those concentrated loans in the first place. Personally I also assume that Lendy was mostly focussing on the good news aspect and may not have given enough attention to the people who are detrimentally affected by the change and it might just be not recognising something that they would have recognised if they had thought a bit more about it during the excitement of a mostly beneficial change. That is, I don't think there was any malice, just oversight that they will find some solution for. I was on an O2 contract some years ago when they changed the T+C's part way through (can't remember detail exactly now, but 07 and 08 numbers were changing to national rate, not local rate or something like that). The only option I had was a free termination of contract or accept the new T+C's. I didn't have the option of claiming back the difference for the remainder of the contract. Admin nightmare! What was in the past stays there, this is how it is going forward, a line has to be drawn somewhere. Keep it (accept) or sell it (decline) are the only options.
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james
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Post by james on Sept 4, 2015 1:29:36 GMT
I was on an O2 contract some years ago when they changed the T+C's part way through (can't remember detail exactly now, but 07 and 08 numbers were changing to national rate, not local rate or something like that). The only option I had was a free termination of contract or accept the new T+C's. I didn't have the option of claiming back the difference for the remainder of the contract. Admin nightmare! What was in the past stays there, this is how it is going forward, a line has to be drawn somewhere. Keep it (accept) or sell it (decline) are the only options. Changing for the future and new loans is fine. What Lendy is doing is akin to changing the charges for the calls that have already been made under the old terms. An investment firm doesn't get to force people to sell the investments that they have already sold because they no longer like the terms they sold them under.
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mack
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Post by mack on Sept 4, 2015 6:25:08 GMT
I was on an O2 contract some years ago when they changed the T+C's part way through (can't remember detail exactly now, but 07 and 08 numbers were changing to national rate, not local rate or something like that). The only option I had was a free termination of contract or accept the new T+C's. I didn't have the option of claiming back the difference for the remainder of the contract. Admin nightmare! What was in the past stays there, this is how it is going forward, a line has to be drawn somewhere. Keep it (accept) or sell it (decline) are the only options. Changing for the future and new loans is fine. What Lendy is doing is akin to changing the charges for the calls that have already been made under the old terms. An investment firm doesn't get to force people to sell the investments that they have already sold because they no longer like the terms they sold them under. James you seem to be talking complete sense. I seriously don't understand how you can compare a phone contract with prospective changes to a serious commercial investment RETROSPECTIVELY. I would defer to commercial lawyers and the FCA and not the forum or SS.
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Post by meledor on Sept 4, 2015 7:45:30 GMT
Anyone investing in only a few loans and now complaining under the new terms that they are not well diversified was by implication expecting Saving Stream to compensate them for the risk they were taking on had one of their loans defaulted with limited recovery.
I am not sure how such an expectation squares with the limit on liability in the existing terms and conditions to the amount of interest earned rather than the principal.
"12.3 Our liability to you on any basis whatsoever shall not exceed the total amount of revenue earned by Saving Stream in respect of transactions entered into by you through SavingStream.co.uk..."
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SteveT
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Post by SteveT on Sept 4, 2015 8:11:15 GMT
Anyone investing in only a few loans and now complaining under the new terms that they are not well diversified was by implication expecting Saving Stream to compensate them for the risk they were taking on had one of their loans defaulted with limited recovery.
I am not sure how such an expectation squares with the limit on liability in the existing terms and conditions to the amount of interest earned rather than the principal.
"12.3 Our liability to you on any basis whatsoever shall not exceed the total amount of revenue earned by Saving Stream in respect of transactions entered into by you through SavingStream.co.uk..." Yes, I suspect a number of people have assumed to date that their SS lending is a lot more "secured" than the legal reality. Lendy have, very laudably, made sure that no lender has suffered a loss on any SS investment so far and I'm certain that they will continue to do their absolute utmost to sustain this. However, if 2 or 3 very large bridging loans were to go badly off the rails in quick succession (as might happen if the commercial property market took a sudden nose-dive) then Lendy simply wouldn't have the resources to bail out its lenders in full, however much they might wish to. In such circumstances I would much rather that problems are ring-fenced within the specific loans that have defaulted and do not extend to my entire SS loan book (especially if I happen to have no money invested in the problem loans!!)
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mikes1531
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Post by mikes1531 on Sept 11, 2015 16:24:11 GMT
Anyone investing in only a few loans and now complaining under the new terms that they are not well diversified was by implication expecting Saving Stream to compensate them for the risk they were taking on had one of their loans defaulted with limited recovery.
I am not sure how such an expectation squares with the limit on liability in the existing terms and conditions to the amount of interest earned rather than the principal.
"12.3 Our liability to you on any basis whatsoever shall not exceed the total amount of revenue earned by Saving Stream in respect of transactions entered into by you through SavingStream.co.uk..." This is an issue that's been around for a while. As ilmoro pointed out, the 'current' Ts&Cs haven't been updated to reflect changes that SS/Lendy have made to their model and statements they've made about their policies, the most significant of which was a commitment made here in the P2PIF -- more than once, IIRC -- that they would use their own resources to cover any losses lenders might be subject to. It has been pointed out -- again more than once, IIRC -- that the Ts&Cs should have been amended to reflect such changes, but that hasn't happened. If an event were to come up that tested the situation, I think you can be sure that the lawyers would be called in and there'd be a big mess to sort out. In that case, I think the winners would be the lawyers! 
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