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Did the UK FCA know that Lendy was lying to its customers?


Lawrence McOchillo

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According to a report published by The Times, the UK Financial Conduct Authority (FCA) knew that Lendy, the collapsed peer-to-peer lending platform, had misled some of its investors at least ten months before granting the company full authorisation in July 2018.

The FCA had ordered Lendy to compensate some customers back in 2017 after they had invested in loans based on information which wasn't accurate, which highlighted some of the lender’s regulatory shortfalls.

Many investors were shocked that the UK regulator knew of the firm’s bad business practices yet went ahead and allowed it to operate on a large scale.

The FCA admitted via a statement that it was aware of the company’s misdeeds back in 2017, but that the company was executing a remediation plan at the time of authorisation.

Lendy had crowdsourced money from retail investors since its founding in 2012 and then used the funds to advance secured loans to property developers from 2014. However, the platform failed in May 2019 with over £160m in outstanding loans, over £90m of which was in default.

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