LONDON — The city watchdog is said to be looking into accounts of peer-to-peer lender Lendy Finance, according to The Telegraph.
The Sunday Telegraph revealed last month that nearly a quarter of Lendy Finance’s loan book was outside terms, meaning repayments were late.
This has now grown to a third of the loan book, or £59 million of loans, according to The Telegraph.
The Financial Conduct Authority (FCA) is said to be investigating the company’s books, as part of growing concerns about the lender’s property valuations and wider concerns about how peer-to-peer lenders disclose default rates and levels of due diligence.
The UK’s peer-to-peer lenders will soon have to disclose more detailed information about how much investors have lost on loans. An ongoing FCA consultation into creditworthiness in consumer credit was begun in July, prompted by concerns about the risk of potential harm to customers from poor culture and practice by firms.
Although Lendy said its due diligence team had been strengthened this year, it told investors last week it was suspending a £3.4 million loan on Westbury Castle Estate, because of an “adverse opinion” on the property value, according to The Telegraph.
“As part of our application for full FCA authorization, we meet with the FCA on a regular basis,” a spokesperson for Lendy told the paper. The company also said it had the option of pursuing legal remedies cases of negligent overvaluations.