You are here: Home - Saving & Banking - News -

Lost money due to dodgy P2P advice? You may receive compensation

Written by: Paloma Kubiak
The peer to peer industry may come under the protective umbrella of the Financial Services Compensation Scheme, it has been revealed.

Peer 2 peer lending has attracted the attention of interest-starved investors but one of the main criticisms and risk of the industry is that it’s not covered by the Financial Services Compensation Scheme (FSCS).

Currently up to £75,000 is protected if it’s deposited into a UK-regulated bank, building society or credit union so if anything were to go wrong, you’d get your money back.

P2P lenders don’t afford the same protection so if the worst happened, the government wouldn’t help you.

But the FSCS said that it “may be able to compensate eligible investors in relation to unsuitable advice they received about the merits of investing in P2P lending via loan-based crowdfunding platforms”.

It added that depending on individual circumstances, it may be able to provide compensation of up to £50,000 in relation to investment advice.

However, in order to be eligible, a claim must meet all of the following criteria:

  • the advice you received to buy the investment must have been given on or after 6 April 2016;
  • the firm that advised you must have been authorised by the appropriate regulator to do so at that time (P2P lending sites have been regulated by the Financial Conduct Authority (FCA) since 1 April 2014).
  • you must have lost money as a result of the advice you were given; and
  • the firm (or its principals) no longer has sufficient assets to meet claims for compensation.

The particular peer-to-peer loan agreement will also need to meet the requirements for the FCA to consider it to be a P2P agreement.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Not saving enough is one of the biggest regrets in retirement

More than 40% of pensioners who stopped working in the past five years said they regretted their retirement-planning decisions as...