COLLATERAL investors were left in the dark this week after the peer-to-peer lending platform shut down its website and became uncontactable, amid questions over the firm’s regulatory status.
The Manchester-based firm shut down its website on Monday and displayed a message saying: “We are currently in the process of upgrading our servers and our network infrastructure. We apologise for the inconvenience and are working to get everything back to normal as soon as possible.”
A number of investors have since contacted Peer2Peer Finance News to complain that they could not get through to the Collateral team.
Collateral allegedly emailed investors on Wednesday morning saying that “an update is being prepared and will be emailed to all lenders later today”, according to a user’s post on the P2P Independent Forum, with no further explanation and no update as of 6pm GMT.
Meanwhile, it emerged that the three limited companies listed on the Financial Services Register that have traded under the name of Collateral have not had regulatory permission to operate as a consumer credit business for at least 11 months and have all now been dissolved.
Cash4Assets, which traded under the name Collateral, had cancelled its interim permissions with the Financial Conduct Authority (FCA). A permission end date is given of 23 March 2015.
Regal Pawnbroker, which also listed Collateral as one of its trading names, saw its interim permissions lapse on 31 March 2016.
And Goldmann and Sons saw its interim authorisation lapse on 31 March 2016.
Furthermore, Collateral (UK) Limited, which is cited on the platform’s regular loan updates to investors, cannot be found on the Financial Services Register at all.
The City watchdog took over regulation of the consumer credit industry in 2014 and all authorised firms are included on the Financial Services Register. An FCA spokesperson confirmed that the register is up to date.
In addition, Collateral’s loan updates to investors no longer include a statement saying that the firm is regulated by the FCA.
A spokesperson from the FCA told Peer2Peer Finance News that they were aware of the issue but were unable to comment further at this time.
Collateral said earlier this month that it was reassessing its business model after finding the projects on offer were too big for its investor base.
The lender previously offered pawnbroking-style loans against items such as jewellery and cars but shifted towards land and property last year.
Collateral (UK) posted losses of £294,179 in its latest annual accounts filed with Companies House, for the financial year ended 30 November 2016. This had widened from losses of £82,353 the previous year.
Collateral did not respond to requests for comment.