P2P lender Collateral goes into administration
- Suzie Neuwirth
- On March 1, 2018
COLLATERAL has purportedly gone in to administration, after it emerged that it was operating without the correct regulatory permissions.
The Manchester-based peer-to-peer lender has been uncontactable since it shut down its website on Monday.
A letter seen by Peer2Peer Finance News, allegedly from insolvency firm Refresh Recovery, said that Collateral (UK) Limited has gone into administration. Refresh Recovery was appointed administrator on 28 February, the letter said.
“The company was operating in the belief that it was authorised and regulated by the Financial Conduct Authority (FCA) under interim permission,” the letter said. “It has transpired that this is not the case and consequently the company has ceased lending.”
Collateral investors will still be repaid, subject to the borrower continuing to make payments of interest, the letter said.
Collateral’s borrowers must continue to make payments in accordance with their loan agreement or else risk recovery proceedings being taken against them, the letter added.
Collateral has allegedly hired external counsel and specialist compliance consultants regarding its approach to the business.
“The company has ring fenced the existing loan book and will look to wind this down over the life of the loans in an appropriate way,” the letter said. “The company is reviewing how it might best continue the business, a number of potential routes forward have been identified but these are still being assessed.”
Alleged email correspondence between the administrator and an investor, posted on the P2P Independent Forum, said that the intention is for all investors to recover their funds in full as the various investments are realised.
All monies that are sat on the platform and are not invested are ring-fenced in a separate client account and will be returned to investors after the administrator has obtained control of the bank account and carried out a reconciliation, the update said.
The administrator is purportedly looking into the possibility of the website being opened so that customers can view the balance of their investments, although this will not happen until next week at the earliest.
The FCA, Refresh Recovery and Collateral have been contacted for comment.
TagsCollateral Collateral (UK) Limited Financial Conduct Authority P2P platform default p2p regulation Refresh Recovery
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