RateSetter backtracks on Rolling Market rate changes
RATESETTER has reversed its decision to stop investors setting their own rate for capital reinvesting on its Rolling Market.
The peer-to-peer lender implemented an overhaul of its popular Rolling Market product on 6 June, no longer allowing investors to set their own rate on reinvested money.
Under the changes, investors had to use the market rate based on supply and demand on the platform.
However, following a backlash from some investors RateSetter has announced it is reversing the move.
Read more: RateSetter overhauls Rolling Market product
In an email to customers, the lender said feedback demonstrated how much investors valued the option to set their own rate for capital reinvesting.
“We agree that the choice of whether to invest at the market rate or to set your rate is one of the empowering features that makes RateSetter stand out as a market-leading investment product because it gives you control over the rate at which you are lending,” RateSetter wrote.
“So, taking on board your feedback, we are planning to reintroduce the ability to set your rate on reinvestments. This will harmonise the Rolling Market with the other RateSetter markets and give you the control you have told us you want.”
Nicholas Hamblin, a RateSetter investor, said the lender effectively took away its unique business model when it overhauled its Rolling Market last month.
“I joined RateSetter to set my own rates,” he said. “I was very disappointed when they brought in a new system for the Rolling Market. I have been steadily withdrawing money since they made that decision. It appears they have now reversed the decision and, if that’s correct, then I will review my position.”
Rhydian Lewis (pictured), chief executive of RateSetter, told Peer2Peer Finance News it has reversed the decision because investors like to have control over the rate at which they lend.
“They can use rate-setting to act as a floor rate or they can use rate-setting to hold out for a higher rate,” he said. “Also, it is the mechanic of rate-setting on our exchange that allows our investors to always be able to lend their money quickly – you can always lower your rate to go to the front of the queue and you will be matched next and therefore start earning interest quicker.”
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