Updates to the Terms & Conditions
These changes will reflect (1) improvements to our debt collection processes which are being brought in-house, (2) more lending and borrowing opportunities through the extension of loan types on the marketplace, and (3) necessary changes for FCA regulation later this year.
Here are the key changes you should know about:
1. We’re improving our debt collection and bringing it in-house
We will soon handle all debt collection procedures in-house so we can work directly with responsive borrowers to help them if they come into financial difficulty, which will also help us to provide more detailed communication to investors about these loans.
We’re also making changes to ensure that we can act faster and more robustly with non-responsive borrowers. Going forward, investors will now have 7 days to opt out of novation after a loan defaults, reduced from 14.
We’re improving the clarity in the Loan Conditions surrounding payments received from businesses whose loan is in arrears. Any payment received will be first applied to the arrears, before the most recent monthly amount owed.
2. Bringing more property finance to the marketplace
As you may be aware, we are expanding the types of loans on offer to investors and businesses, by bringing more property finance loans to the marketplace. We’ve created Funding Circle Property Finance Limited, a subsidiary that will mirror Funding Circle Recoveries Limited. It will be used for holding security of property finance loans.
We’ve also had some feedback from borrowers about the name of “Funding Circle Recoveries Limited” (FCRL), which currently holds security on borrowers. This name is on a public record and borrowers have told us that “Recoveries” in the name may suggest that the borrower has been in financial difficulty when this is not actually the case. We’re changing the name to Funding Circle Trustee Limited (FCTL) as it is better suited, since it reflects the fact that the company is predominantly a security trustee.
3. Getting ready for regulation
From April, the peer-to-peer lending industry will be regulated and we are starting to make small changes now so we’re on course to comply with regulation. One such change is formalising the handling of fair complaints, which is an operating principle set out by the P2P Financial Association.
These changes will be reflected in the updated Loan Conditions, as well as the Terms & Conditions for investors, borrowers and intermediaries. It’s important to have a look, as by continuing to use the Funding Circle marketplace you agree to be bound by these revised terms.
On Monday 17th February, before making a bid you’ll also be asked to re-accept the Loan Conditions.