Ministry of facts

Good evening Stuart,



I called you to have a constructive dialogue regarding various issues in a courteous manner. Since there isn't a way I could reply to your opening post without reading as being confrontational and contentious; which reflects badly on us both and frankly isn’t necessary.



I tried to interpret your grievances and offered my sincere effort to redress your issues. I politely asked you to neutralise the tone and to ask considered questions, in a professional manner, which I’m pleased to respond to below:

1. I'll let you know once my video has been edited. There was around 8 hours of footage taken from 6 cameras at the event. I'm expecting to have it later this week, possibly tomorrow.
2. Because we have all borrower advertising and marketing on hold while we embed some new services to the loan application process. This will make it easier to receive borrower bank statement data and accounts info. However, while we are doing this work we are wanting to limit the applications received. This will change in July-August when I forecast we will be able to list 10-15 loans per month. Please bear with us.
   
3. Bad Debts are currently defined as loans we have written off, whereby we expect no further recovery, normally after bankruptcy. Given the courts and legal proceedings this can take years. From our conversation, I understand that you believe loans at 180 days past due should be marked as a 'Bad Debt'. From our initial research, we learned that lenders wanted a ‘final' state whereby they should not expect any further recovery. A borrower may have failed to keep to the repayment schedule (and therefore be in default) but may continue to make (some form of) repayments for several months. We believe that lender understand that 'Defaulted' loans are in recovery, and that the finality comes from the 'Recovered' or 'Bad Debt' states.
4. It’s a pity my intentions were ill received… After reviewing your account, I can see why you are so jaundice from P2P lending... You have managed to select loans, promptly before they fall into default. Your transaction gain suggests you profited from other sellers discounting their position on the loan, which can occur when a borrower falls behind with its repayments. I noticed in November 16 you started selling various microloans, but did not withdraw the balance until the end of December. During this time, you had a substantial balance earning 0%, which will have reduced your net return. Your investment style of chasing discounted loans, is very untypical and a high-risk strategy which I would discourage. I think you have been unfortunate, and I invited you to try a different investment strategy, offering for you to take a new and different investment approach. I really feel that if you are more diligent in selecting loans, that you will enjoy healthy returns, as with the vast majority of investors. I don’t think that ‘having another go’ needs to limit your ‘freedom of speech’. But if you don’t accept my suggestion, then you’ll not have the opportunity to build a performing portfolio.
   
5. wrt the golfing commentator loan, you mentioned that because he’s going through a divorce you believe his personal assets may be negligible in the event of a recovery and that most his business comes from a single customer. I agreed with you that there is a high client-concentration risk, but that both risks were visible in the loan profile for investors to read. If you think we should compile a list of key risks and highlight these to lenders then I’m happy to take your thoughts and comments on what specific risks you think should be called out and explained in some additional detail.
   

I take my hat off to your social work Stuart. Some of my friends are social workers, they never get enough support.



I respect your decision to leave the asset class and the disenchantment you feel with the P2P lending sector. Owing to your experiences, I will consider some alerts we can use, to help highlight potential risks to new lenders.

Are all investors going to be offered a "promotional (monetary) sum"? If so, I accept.

Join the queue. I'm first after stub8535 and I already have plans in place to use mine to good effect.

I must say it's really good of Daniel to make such an offer. I just hope it's not yet another empty promise from ReBS...

'It’s a pity my intentions were ill received… After reviewing your account, I can see why you are so jaundice from P2P lending... You have managed to select loans, promptly before they fall into default. Your transaction gain suggests you profited from other sellers discounting their position on the loan, which can occur when a borrower falls behind with its repayments. I noticed in November 16 you started selling various microloans, but did not withdraw the balance until the end of December. During this time, you had a substantial balance earning 0%, which will have reduced your net return. Your investment style of chasing discounted loans, is very untypical and a high-risk strategy which I would discourage. I think you have been unfortunate, and I invited you to try a different investment strategy, offering for you to take a new and different investment approach. I really feel that if you are more diligent in selecting loans, that you will enjoy healthy returns, as with the vast majority of investors. I don’t think that ‘having another go’ needs to limit your ‘freedom of speech’. But if you don’t accept my suggestion, then you’ll not have the opportunity to build a performing portfolio.'

There's my answer there :-) live by the sword... 

Don't blame the platform (which has it's faults) for your greedy stupidity.

Stuart you're obviously not comfortable incurring losses. This type of investment is completely inappropriate for you and you should never have signed up for any of it.
I'm very sorry that you were manipulated into engaging in behaviour far riskier than you realised. It should be noted however that the people manipulating you were not in fact this company: they are very clear that it's a risky business - it's just that many of their customers believe, wrongly, that these warnings are exaggerated.
No, you were led by the nose not by REBS but by the fact the entire banking system is telling you that no matter where you park your money, it's never going to keep up with rising prices, hence if you plan to sit on a thousand pounds for the next thirty years, by the time you want to take it out it'll be worthless.
It's rational, under those circumstances, for you to seek higher yields that won't destroy your hard work.

Unfortunately that's what you get for living in a communist country. When everyone rails against 'the rich', while calling for ever greater services from government, of course the financial environment will tend to sacrifice the needs of savers for the needs of borrowers, so that the state can meet all the demands being made of it. The only shield against the mountains of debt building up year after year would normally be the lobbying of savers, but since everyone despises 'the rich' and resents one person having more than another person, any appeals to preserve your bank balance will fall on deaf ears.

There's no easy answer to any of this unfortunately, but stressing yourself out by risking your savings by lending them to unknown businessmen based on their personal guarantees that they'll pay you back with interest some day (honest) doesn't seem like something that meets your life's needs very well at all.

Daniel Rajkumar has made you a rather generous offer, and it's surprising to me that other lenders aren't up in arms about it, given that in effect he's asking all of them to share in your losses! You should grab it with both hands, put your money back in the bank in a safe 0.7% ISA account, and try to offset any losses from inflation with additional top-up savings funded through under-consumption.

Once you survive and come out the other side of this socialist experiment, you'll be in the tiny minority of working people with the wherewithal to rebuild society for real. Instead of having egg on your face for having made mistakes (when in fact peer-to-peer lending is just gambling, no better than picking a horse with 'form'), your prudent and frugal nature will finally be recognised for what it is: a deep virtue, in fact the principal human virtue responsible for the very existence of civilisation itself.

Looks like a good  example of why a secondary markets are not always a good thing. Buying loans as they are discounted without understand the reasons why someone is selling at a discount. With the way a lot of secondary market are set up this is going to happen more and more.