Safety and risk warnings
When lending or borrowing on a peer-to-peer (P2P) platform there are general risks as follows:
- Data Theft, ID Theft, Fraud
With ID theft going on there is a risk of a user fraudulently impersonating another. We are committed to ensuring your security and confidentiality and we request that you adhere to our guidelines for safe use. For example, do not give your login and password to anyone. Always ensure that you are logged out of the site before leaving your computer. Ensure that your username does not give away your identity.
We have implemented many tests and checks to mitigate this risk: ID and address verification via Equifax, the Credit Reference Agency and fraud checks via CIFAS, the UK's Fraud Prevention Service, of which we are members. We also check that the user actually lives at the registered address and that the bank account details given actually belong to the user. We have secured your data, using encryption where necessary and the website from hacker attacks.
- Money Laundering
Peer to peer sites do not present a high risk of money laundering. Nonetheless we have implemented many Anti Money Laundering ("AML") tests and checks which are more focussed on the lender. The basic checks are similar to those above, but there are more specific tests. We require passport photo ID and utility bills. We check for high account funds throughput combined with low volume lending, and any unusually large transactions. We also prevent transactions being attempted with connected persons.
- System, Operation or Administration Failure
Software systems are vulnerable to "bugs" which may create unexpected results. Operations and administrative errors or omissions can also create unexpected results. Having designed and written all the systems and operational procedures in-house we have a deep understanding of how to correct or fix any "bugs" or faults.
- Failure of LendLoanInvest or Madiston
Peer to peer websites are not parties to any loan contracts, but merely enable their agreement directly between the borrower and the lenders. In the unlikely event of Madiston plc failing, the loan agreements will continue as before. In this event Madiston plc will arrange a reputable Loan Servicing Company to continue to oversee the collection and distribution of repayments as before.
Following a company failure, in the event of borrower default, the repayments continue to be collected by the reputable professional Debt Collections Agency ("DCA") that has been appointed by Madiston, on behalf of the lenders, to collect any arrears. The costs of the collections activity will not vary if Madiston plc has failed. Debts assigned to the DCA, will continue to be pursued where possible and any sums recovered returned as if this website and Madiston plc still existed.
- Bank Failure
Prior to lending out your money, it is in our segregated Client Money Bank Account, and is therefore not part of the assets of Madiston plc. In this situation and the case of a bank failure the loss of your money IS covered by the Financial Services Compensation Scheme (FSCS). When lent out, it is NOT covered by the FSCS.