Watchdog demands high standards
Lending Crowd backs FCA call to put customer first
The Financial Conduct Authority (FCA) review focused on ensuring that customers are treated fairly, that platforms have appropriate experience and processes, and that they focus on risk and making sure marketing communications meet financial promotion standards.
Stuart Lunn, chief executive of Edinburgh-based LendingCrowd, said: “We welcome the FCA review, which put consumers at the heart of the way crowdfunding organisations are operated. Treating consumer fairly is very important as we continue to grow our new platform in the peer-to-business sector.
“Our aim is to treat both borrowers and lenders who use our platform with equal levels of professionalism and this includes implementing robust credit risk practices. We pride ourselves in the approach we have taken, putting the customer first as the industry continues to rapidly evolve.”
Data compiled for the review relied heavily on information collected by Cambridge University and Nesta which revealed the rapid growth of crowdfunding. The industry raised £1.74 billion for borrowers last year, three times higher than in 2013.
Christine Farnish, chair of the Peer-to-Peer Finance Assocation, said: “The FCA’s review of the peer-to-peer lending industry comes at an appropriate time. While I am encouraged to see growth and the wider benefits delivered through our sector, we must remain vigilant to the wider challenges too.
“The report is correct to highlight incidences of where companies have misled customers and the FCA is right to take a tough line as this could bring the whole sector into disrepute.”
LendingCrowd.com was launched in September 2014. To date, the company has facilitated 10 business loans and has a strong pipeline of other opportunities.