Advice to invest in peer-to-peer lending may now be covered by FSCS
FSCS may be able to compensate eligible investors in relation to unsuitable advice they receive about the merits of investing in peer-to-peer lending via loan-based crowdfunding platforms.
Depending on individual circumstances, FSCS may be able to provide compensation of up to £50,000 in relation to investment advice.
Peer-to-peer lending sites have been regulated by the Financial Conduct Authority (FCA) since 1 April 2014.
A peer-to-peer advice claim would need to meet all of the following criteria:
- the advice you received to buy the investment must have been given on or after6 April 2016;
- the firm that advised you must have been authorised by the appropriate regulator to do so at that time;
- you must have lost money as a result of the advice you were given; and
- the firm (or its principals) no longer has sufficient assets to meet claims for compensation.
The particular peer-to-peer loan agreement will also need to meet the requirements for the FCA to consider it to be a ‘P2P agreement’, which will depend on individual circumstances.
FSCS does not provide compensation in relation to loss caused by bad investment performance.
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