Well, that'll teach me...

I would add a bit more information for perspective.  Of the above 13 loans which defaulted before first payment, 7 were whole loans which never sullied our screens.  Of the 6 which did bite us, 4 have been completely recovered (less 70 pence).  The remaining 2, the most recent, were for £60,600 in total.

  922  A   £40,000 (recovered)
 3696  B  £100,000 (£99,999.30 recovered)
 5034  D   £90,000 (recovered)
 7311  C  £184,220 (recovered)
25739  B   £50,000
37958  D   £10,600

I don't know enough FC history to know whether the earlier recoveries were truly recovered from the borrower, or merely refunded by FC.

I've never bought any E loans, but was curious why they never appear in 'loan requests', only in 'loan parts'

Well, we all know that Funding Circle "only lend to strong and stable, creditworthy businesses" ... they were just ahead of their time in the new-speak meaning of "strong and stable".

Your Funding Circle experience is certainly not unique. I guess the platform would point out that loans which are in arrears cannot be sold, as with downgraded 'no risk band' loans where some form of 'material' credit event has occurred. As such, FC would probably argue that, at the point of transfer, these were not 'bad loans'. As for being 'duped' by other investors, I would guess that a (small) minority of sellers have direct knowledge of specific adverse developments w.r.t. the underlying borrowers. Many more adopt 'mechanical' loan part selling strategies, e.g. selling before x repayments have been made/attempted, or selling a.s.a.p. if a borrower which has been late with a repayment then pays those arrears and so the related loan becomes tradable again, at least until the next scheduled repayment date. So, selling is more likely to be based on a defined set of trading rules or safety first principles rather than anything approaching 'insider knowledge'. Secondary market sales do require two willing parties and, by not discriminating on some factors Autobid can fall into the 'greater fools' category. Unless you can manually root out potential problem loans it is arguable that secondary market purchases may be more likely to result in an adverse selection of loans, although FC's own data used to suggest that a significant proportion of manual only investors failed to outperform the much maligned Autobid.

The task for secondary market purchasers is made more difficult because FC does not reveal to investors all potentially relevant information w.r.t. credit events involving borrowers. For example, based on previous incidents and subsequent discussions with FC, it has not in the past disclosed all instances of CCJs against a borrower. I was informed at the time that these are deemed material only when in excess of c.£10,000! So, there may be many CCJs which have gone unreported but which might have had an influence on a lender's decision to purchase or retain related loan parts. IIRC, in the earlier days of FC there were even some actual insolvencies which had not been disclosed to borrowers, and these remained hidden until a big enough stink was made about the situation on a public forum and the, albeit far from comprehensive, loan comments function was introduced in response.

In addition to the list provided by spiker above, there is another related category of loan, also relatively rare, whereby the borrower never made any repayments but was not defaulted prior to that first payment. Examples include the 3696 loan mentioned in the list and, most recently 35677. In the case of 3696 this was defaulted 3 days after the third repayment date had passed with no repayments having been made; FC refunded investor's capital on the basis that, "We have made the discretionary decision to do this before the recoveries process is complete due to the circumstances with this case, where the business borrowed for working capital but failed to make any repayments". Times have changed and 35677 is now 80 days late and has still not been defaulted. There was a winding up petition published around the time of the first repayment due date. Given the time required to reach that stage it seems highly possible that this potential action was known to the borrower at the time of the loan request being listed on the platform; this could suggest a failure to disclose relevant information and/or a failure of platform due diligence. However, whereas before the platform did the decent thing and refunded investors there is no sign of that this time. Standards, imo, appear to have slipped so caution, as ever, is advised.

You haven't been duped or ripped off by anybody. Autobid is a tool of convenience; you put in your funds, set it up how you like it, click go and forget about it. Autobid will manage your account and, historically at least, earn you a reasonable return.

It is also possible to turn off autobid and actively manage your account yourself. It takes considerable time and effort, but by putting this effort in it is possible (although by no means guaranteed) to get better returns than autobid.

What you seem to be saying is either:
1. You want the returns of the manual investors but without bothering to put in the effort. Well, tough, there's no such thing as a free lunch, or
2. You want manual bidding banned so everyone is dragged back to your level. A valid view, if a bit of a dog-in-a-manger attitude, but beware of unintended consequences. Banning manual investing is likely to lead to a loss of retail funds from the platform, and hence more loans going as whole loans.

The 3 loans you bought were not bad loans when you bought them, otherwise they would be unsaleable. It is occasionally possible to detect that a loan has become more risky, and the manual investors will sell these loans quickly if they uncover the problem. However, this is quite rare, and most "flippers" just apply fairly crude algorithms to their investing ("Sell after X months" is a common strategy, for example). The huge majority of these loans parts go on to pay without problem. I notice you've failed to say how many loan parts autobid has bought or you that *haven't* defaulted; if it isn't considerably more than 3 then you've been very unlucky (in the sense that, by chance, you're in the "bad" tail of the normal distribution rather than any mystical or divine interpretation of luck).

Actually you will (usually) know it has been late on a payment, IFF FC has bothered to document it in the loan comments and IFF you actually read same. Of course Autobodge does not do any such reading, and is quite liable to buy 'dented' SM parts which a manual buyer would run a mile from. If people put something up for sale, there is usually a reason .. sometimes a good reason ('I need the cash for my holiday') sometimes a dubious one ('This loan is a ticking bomb, let me pass it on'). Caveat emptor applies. I still have an Egg Farm part bought on the SM (at a very attractive interest rate at the time) which was late, later, RBR, defaulted, and now enjoying full legal action (5 years later) .. my bad, for a) letting autobodge loose in the first place and b) failing to unload it again when I (briefly) had a chance.