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Post by Financial Thing on Feb 1, 2016 16:56:59 GMT
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pikestaff
Member of DD Central
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Post by pikestaff on Feb 1, 2016 17:34:28 GMT
There's always fraud risk. It's why I: - only invest on platforms that are transparent
- don't invest in anything that seems to good to be true
- won't be adding any new platforms until they have full authorisation from the FCA.
Some platforms will be fraudulent from the start (this seems to be one), and some will be drawn into fraud to try to keep things going. Being generous, I will put Trustbuddy in the second category. |
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jonah
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Post by jonah on Feb 1, 2016 20:19:59 GMT
Full authorisation could really "thin the herd" especially of smaller platforms. If as suggested elsewhere, it is a requirement before ISAs are possible then getting it sooner rather than later could be a good marketing tool.
That said, I agree with the above about wanting to see it before I go near another new platform.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Feb 2, 2016 2:46:51 GMT
There's always fraud risk. It's why I: - only invest on platforms that are transparent
- don't invest in anything that seems to good to be true
- won't be adding any new platforms until they have full authorisation from the FCA.
Some platforms will be fraudulent from the start (this seems to be one), and some will be drawn into fraud to try to keep things going. Being generous, I will put Trustbuddy in the second category. Although I understand that this is your personal preference; it is a tad unfair to those without full authorisation because they are unable to apply for full authorisation until their slot comes around. As things stand a lot of P2P lenders can only have interim permission; they only have this because of their previously perfectly acceptable consumer credit licence.
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Investor
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Post by Investor on Feb 4, 2016 11:20:59 GMT
Surprised that the fact that the chairman is called Ding Ning did not set alarm bells ringing long before this scheme reach the levels it has before becoming unsustainable.
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jonno
Member of DD Central
nil satis nisi optimum
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Post by jonno on Feb 4, 2016 11:30:13 GMT
Surprised that the fact that the chairman is called Ding Ning did not set alarm bells ringing long before this scheme reach the levels it has before becoming unsustainable. Maybe. But at least it wasn't Ding Dong 
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oldgrumpy
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Post by oldgrumpy on Feb 4, 2016 11:32:24 GMT
Surprised that the fact that the chairman is called Ding Ning did not set alarm bells ringing long before this scheme reach the levels it has before becoming unsustainable. Maybe. But at least it wasn't Ding Dong Damn! I was going to crack that one! 
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oldgrumpy
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Post by oldgrumpy on Feb 4, 2016 11:46:14 GMT
Maybe. But at least it wasn't Ding Dong Damn! I was going to crack that one! Never mind! On the Ning Nang Nong Where the Cows go Bong! And the monkeys all say BOO! There's a mean Ding Ning Makes your cash go Ping! And your savings turn to poo. When the Ding Ning thing Makes your stash go zing And sticks two fingers up at you, It's Ning Nang Nong, Cows go Bong! Nong Nang Ning, Cash goes ping. Nong Ning Nang, Your wealth goes bang! What a nasty place to belong Is the Ding Ning Ning Nang Nong!! By Spike Grumpigan 2016 Alternative version, sorry about quality; he was clearly struggling  World Premier Recording: Attachments:Ning Ding Thing.wav (169.62 KB)
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Post by extremis on May 13, 2016 23:39:58 GMT
With the recent boom of p2p lending, i am afraid Ezubao won't be the last Ponzi scheme. Half year ago, we also had Trustbuddy, i wonder who will be next? The real question is, what are the early signs that a p2p platform might actually be a Ponzi scheme? Is there any way to be sure, or are we condemned to 0.05% interest, or so, that banks offer nowadays? I mean, loan default risk is one thing, but platform fraud is completely another; while there is always a possibility a platform folds, a Ponzi scheme will certainly do so by design.
What if it was standard practice that borrowers' details (name, address, full contact information) were listed with each loan? Wouldn't that mitigate the risk? Or the only viable solution is to extend compensation to investments (up to a certain amount)?
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littleoldlady
Member of DD Central
Running down all platforms due to age
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Post by littleoldlady on May 16, 2016 10:18:45 GMT
a Ponzi scheme will certainly do so by design. I doubt that that is true. A scheme might start off intending to be honest, but when returns turn out to be not as high as expected and promised the temptation to top up returns from new money coming in is high. Any time that new deposits exceed withdrawals there is this risk. In the UK we have to rely on the FCA But maybe you meant deliberate rather than by design.
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Post by extremis on May 17, 2016 17:18:01 GMT
Yes, deliberately is what i meant. However, whether a p2p lending platform is intended to be a Ponzi scheme, or it starts out legit and turns to Ponzi after some time, it makes no difference for the investors. The point is whoever is caught in a Ponzi scheme at the time it collapses will have little chance of making a withdrawal and will loose the money invested. FCA regulation is, of course, good news for us lenders, but i am not sure that's enough. I am afraid platform risk remains high (and also underestimated as most discussions about p2p lending risks usually refer to the possibility of loan defaults rather than the possibility of platform folding).
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shimself
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Post by shimself on May 17, 2016 17:26:14 GMT
...I am afraid platform risk remains high (and also underestimated as most discussions about p2p lending risks usually refer to the possibility of loan defaults rather than the possibility of platform folding). I think you've forgotten the definition of p2p, the borrower owes the lender and the platform takes a cut. So if the platform goes bust the obligation remains and the borrower has no right to walk away
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james
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Post by james on May 17, 2016 18:48:30 GMT
I think you've forgotten the definition of p2p, the borrower owes the lender and the platform takes a cut. So if the platform goes bust the obligation remains and the borrower has no right to walk away Ponzi schemes which may not have any real borrowers, or may have only a few or show. However TrustBuddy started it turned out to have eventually have some bogus loans with no prospect of recovery, as well as real loans with little to no prospect of recovery. The Ponzi or long firm risk is one of the more potentially dangerous ones due to that lack of real borrowers.
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Post by extremis on May 17, 2016 19:41:08 GMT
I think you've forgotten the definition of p2p, the borrower owes the lender and the platform takes a cut. So if the platform goes bust the obligation remains and the borrower has no right to walk away Ponzi schemes which may not have any real borrowers, or may have only a few or show. However TrustBuddy started it turned out to have eventually have some bogus loans with no prospect of recovery, as well as real loans with little to no prospect of recovery. The Ponzi of long firm risk is one of the more potentially dangerous ones due to that lack of real borrowers. Exactly, in Ponzi schemes there may not be any real borrowers. Most p2p platforms do not list borrower details (full name, address, contact information); for all we know information provided could be totally fictitious in order to lure investors in. The way i see it p2p lending has huge potential for abuse and the only thing that could stop them from turning to Ponzi is strict regulation. But, can we really rely on FCA for that? Now, even in the case of a legitimate p2p business, there is substantial risk. Sure, p2p means that the lender has a legal claim over payments from the borrower even in case of platform folding. But who is going to enforce borrowers to continue to pay their loans once they learn the platform has defaulted? Even if they wanted to, they couldn't since they do not have the lenders contact information. FCA regulation dictates that there should be a plan for a third-party to take over in case of default; however, no one expects it to go that smoothly.
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bigfoot12
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Post by bigfoot12 on May 17, 2016 20:04:07 GMT
Exactly, in Ponzi schemes there may not be any real borrowers. Most p2p platforms do not list borrower details (full name, address, contact information); for all we know information provided could be totally fictitious in order to lure investors in. The way i see it p2p lending has huge potential for abuse and the only thing that could stop them from turning to Ponzi is strict regulation. But, can we really rely on FCA for that? Now, even in the case of a legitimate p2p business, there is substantial risk. Sure, p2p means that the lender has a legal claim over payments from the borrower even in case of platform folding. But who is going to enforce borrowers to continue to pay their loans once they learn the platform has defaulted? Even if they wanted to, they couldn't since they do not have the lenders contact information. FCA regulation dictates that there should be a plan for a third-party to take over in case of default; however, no one expects it to go that smoothly. And of course the platform has just folded, why? Perhaps because there was a problem with their paperwork, maybe our contracts aren't binding? Perhaps because their systems crashed or were hacked, we can't see who owes us what. Or one of many other problems which would bode ill for the lenders.
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