Not sure if this has been reported here already but according to the Moneywise website.
Leading comparison websites have removed potentially misleading information from their sites after a Moneywise investigation found peer-to-peer (P2P) investment products included in the same best buy tables as high street savings products.
Apparently the FCA is concerned about the language used in selling these types of products and not enough emphasis is placed on the risks customers face if using P2P as a savings product (really!). Shouldn't they be barking at the relevant site - always behind the curve so to speak - rather than leaving it to someone like Moneywise.
Interesting reading though considering how hard it is to get the banks to lend at anything worth saving in I guess it's inevitable that sharks would start circling.
I have spoken to a number of financial sites or journalists over the years and they still use the word "saver" or "savings" which drives me mad! My own view is that P2P isn't saving, but neither is it investing - it something unique - it is lending.
Saving is perceived to be risk free - which actually it isn't - but that is the perception. Investing is perceived to be risky with the potential for 100% loss or near infinite gain, with volatility and restricted liquidity.
Peer-to-peer lending has the potential for near 100% loss - but that is unlikely and can be mitigated by diversification - but only limited gain (the interest rate). There is little volatility but the liquidity is still quite restrictive.
The most powerful force in the universe is compound interest - Albert Einstein, 1879-1955
"the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made.
"caveat emptor still applies when you are buying your house"
Well, up to a point.
If the seller of a house makes a false statement within any of the documentation that forms part of the contract, then the seller is liable.
In the P2P context, I guess the analogy would lead us to the loan offers that are presented for our consideration. If they contain false information, who is responsible? Borrower, platform or lender? It should depend on whether the information is contained within a document that forms part of the contract, a distinction which is not always as obvious as it should be.
Having said that, it ought to be clear that a table on a price comparison website isn't contractual, though even that boundary is being blurred if said comparison website is taking referral commissions.
yeah I agree, the house bit did seem a bit flakey to me but I found it amusing none the less. Personally I've always been a bit wary of any investment or savings and at my age I don't really have time to recover from bad mistakes so my mind is always more focused on taking minimum risks possible.
As for price comparison sites not sure I'd trust them that far at all. I do use them but specifically more for a pointer to further investigation. For instance energy comparisons are a real mess with the relevant regulators making it worse (except for MSE that is). Fortunately I'm pretty good with a spreadsheet and I just get the basic unit costs and do my own calcs to see if I will benefit.
The other thing that many people probably don't factor in is that all these sites are looking for their own interests first and are taking a cut to make them work for them - i've read somewhere it's in the region of £40. There is also the thorny issue of price blocking (apparently some site rule that the price must not be lower elsewhere). In some circles the thinking is that this stifles rather than promoting it.
I'm guessing that the waters are going to get further muddied with the recent open banking stuff as well.