Some peer-to-peer investment platforms offer higher rates than banks. As a result, many people are taking their chances to earn as much as 16 percent annually. However, such platforms are riskier.
One example is FundingSecure. The company collapsed in October that placed around £80 million of their investors’ money. Although expensive paintings served as security for the company, the art dealer sold the art pieces to someone else.
Peer-to-peer lenders promise higher interest rates than banks. They use the internet to connect investors with companies. Some of the popular platforms are RateSetter, Funding circle, and Zopa. The big players account for most of the £6 billion that went into P2P platforms in 2019, according to investment news sources.
People doubt the stability of P2P investment due to the collapse of two platforms this year alone. Also, investors experienced more than 100 days of delays when withdrawing from Funding Circle.
As a result, the Financial Conduct Authority of the UK is coming up with new rules to protect small investors. The worst P2P collapse happened in May when Lendy went under with outstanding loans worth £160 million.
Gambling news is tamer compared to the story of P2P collapses. The unregulated sector claims many victims over time as companies fail without any warnings. Many financial analysts want the Bank of England to investigate the platforms and provide some deposit protection.
Sports betting software experts warned that investing in P2P platforms is very risky. There’s no deposit protection for investors. Also, if the company goes bankrupt, lenders will get nothing back. It is safer to keep money in banks where deposits up to £85,000 are insured. Investors need to decide if the extra interest is worth risking their money.
According to sportsbook pay per head reviews and news sites, investors don’t know what’s behind P2P companies. These platforms don’t have any examiners looking into the nature of their finances, unlike banks.
Instead of investing in P2P platforms, you should consider becoming a pay per head bookie. You get a better ROI. Also, your investment is safe as long as you choose the right provider.