RateSetter withdraws from P2PFA after breaching transparency rules

RATESETTER has said that it is leaving the Peer-to-Peer Finance Association (P2PFA) after breaching the trade body’s rules.

“Membership requires adherence to the P2PFA Operating Principles including transparency,” said the ‘big three’ peer-to-peer lender in a blog post on its website on Friday.

“No customer has experienced any loss from our actions but we recognise that our actions breached the principles of the Association.”

RateSetter was one of the founding members of the P2PFA.

RateSetter’s transparency came under the spotlight last month, after it told investors that it had made “interventions” on some of its former wholesale lending partners.

The firm had been winding down that segment of its business since last December. Then in February of this year, the Financial Conduct Authority (FCA) confirmed that it was unhappy with the practice.

Detailing the interventions, RateSetter said it purchased the operating subsidiaries of the Vehicle Trading Group in May after the company went into administration because it had taken on too much debt.

The company revealed last month that it had taken ownership of Adpod, an advertising company that borrowed £12m from Vehicle Trading Group in 2015 but got into financial difficulty and still owes £8.5m. The company said it would absorb any losses as opposed to using the provision fund.

RateSetter had not disclosed the Adpod transaction at the time.

“We understand the reasons why RateSetter has withdrawn from the P2PFA membership and respect their decision,” said Robert Pettigrew, director at the P2PFA.

RateSetter is the last of the ‘big three’ platforms to receive full authorisation from the FCA. It is thought that RateSetter has notified the regulator of its decision to leave the trade body.