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Lendy administrators restrict client accounts as overdue loans hit £153m

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  • 03/06/2019
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Lendy administrators restrict client accounts as overdue loans hit £153m
Administrators dealing with the collapse of peer-to-peer platform Lendy have frozen client accounts while the value of loans overdue has soared by more than a third in eight months.

 

As of today, analysis by Mortgage Solutions of Lendy loan data found a total of £153,067,481 worth of loans are overdue, some by almost 1,000 days.

This has soared from £112m worth of loans at the end of October 2018.

 

Accounts on hold

The administrators’ action means those who have lent money through the service and either still have unused balances or returned funds cannot withdraw it until a full reconciliation has taken place.

In a letter to all investors, RSM Restructuring Advisory joint administrator Damian Webb said: “The Administrators are currently reviewing the Lendy loan book with a view to effecting an orderly wind down.

“We are working with the borrowers and enforcement agents to realise the assets and maximise returns to investors.

The investors’ online accounts will remain open, however there will be restrictions on withdrawing funds until further notice,” he said.

 

FCA asset restriction

Lendy operated a separate account for holding client money and the administrators are reviewing this account.

The letter noted that in principle any positive available funds balance in an individual’s online account will be held within the client account for the benefit of that particular investor.

Webb explained it was necessary to complete this process following the Financial Conduct Authority (FCA) placing Lendy under an asset restriction.

“As you may be aware, Lendy was made subject to an asset restriction by the FCA, which has meant that payments from Lendy’s bank account have been restricted and no payments will be released until a full reconciliation has been completed,” he said.

A further update is expected towards the end of this week.

 

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