P2P lender Funding Score sinks into administration
UK peer-to-peer (P2P) lending platform Funding Score has sunk into administration after becoming entangled in a fraud lawsuit and experiencing a group of its borrowers failing to pay back their loans.
Funding Score has provided just under 500 loans worth an estimated £80 million, a majority of which were high interest and secured against assets like property, cars, and jewellery.
Recovery firm CG&Co has been appointed as administrators and is in contact with the Financial Conduct Authority (FCA) over attempting to recover the Funding Score.
A statement posted by CG&Co on the Funding Score website reads: “[Funding Score’s] difficulties have been documented online and investors are aware that certain loans have not performed in line with expectations in addition to the issues caused by the fraud related litigation in which the company has becomes embroiled.”
“In addition, the business has not been able to demonstrate to the FCA that it can continue to meet the threshold conditions necessary to continue conducting regulated activities”.
“The rationale for the appointment of the administrators is that there is a real risk that liquidation would fundamentally damage the value of the company’s assets.”
The FCA sent a letter to 65 P2P companies in September asserting that they need to “act now” and clean up poor practices or face a crackdown from the regulator.
The UK watchdog flagged that disclosure failures were leaving investors with greater risk than they were being informed of, and noted that some firms were making “significant changes” to their business models without informing it.
Read more: FCA introduces new rules for P2P platforms