THE Financial Conduct Authority is investigating fraud in the peer-to-peer lending market and has invited feedback from the public.
The regulator, which recently closed a call for input regarding P2P and crowdfunding rules, told Peer-to-Peer Finance News that it is researching the dangers of fraud in the sector.
“We have invited feedback from readers and are conducting research and investigation into the market to understand to what extent the issues flagged are significant and have the potential to lead to consumer detriment,” said an FCA spokesperson. “We will be publishing feedback in due course.”
The global P2P market has been rocked by fraud scandals in the US and China over the past year, causing damage to the sector’s reputation. However, the UK is yet to see a high-profile incident of its own.
“The P2P sector is not immune to fraud and we do not feel more or less of a target than any other financial service provider,” says Martin Klass, fraud manager at RateSetter.
“We are aware of the threat of fraud and consistently work to try and mitigate all forms of financial crime. Don’t forget that fraud is not just somebody being impersonated by a third party: it can also include trying to hide adverse credit data and exaggeration of income, for example.”
For more on fraud, see our feature in the next monthly print edition of Peer-to-Peer Finance News, which hits desks at the start of November.