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Brief Kuflink Update
Just a brief update since I wrote Kuflink In Trouble With The Financial Conduct Authority in December.
Seemingly no new loans for months
We receive emails to a 4thWay email address when Kuflink loans are available for you to lend in. Over the past four months at least, all of the loans, with the possible exception of one loan, were additional tranches of existing loans, rather than brand new loans. Lender feedback has stated the same: no new loans for months.
I have the explanation for that: I am grateful to a 4thWay user for pointing out to us that Kuflink's restrictions from the financial regulator mean that it can't take on any new borrowers without written permission. That's a distinction I had missed in December, as I immediately thought of new lenders.
In fact, the restriction is against Kuflink taking on any new clients. That's lenders and borrowers.
The FCA restrictions on Kuflink are serious
Whenever you see severe restrictions on the Financial Conduct Authority (FCA) register, it's because the FCA itself sees “risk of harm or potential harm to consumers or markets”.
The FCA does not put up restrictions about business-as-usual, benign matters. If it sees risk of harm, it asks providers to voluntarily agree to restrictions and, if they don't agree, it can make them compulsory.
An FCA representative has confirmed this process doesn't happen in reverse: firms don't approach the FCA to ask it to voluntarily restrict their own business-as-usual choices.
So, if business management were to decide it wanted to pause taking on clients for one or more of its portfolio of investment products, it wouldn't approach the FCA to get a restriction put up on its own company.
That's why you take severe restrictions seriously when the FCA logs them on the register. Not being allowed to take on any new customers is a disastrous restriction for any business to face.
Further reading
Kuflink In Trouble With The Financial Conduct Authority.
How To Check The Financial Services Register For Monsters.
Update: I deleted the final section of this piece, as I felt it was less clear than I wanted it to be and I couldn't fix it without repeating too much from this page and from the December Kuflink update.
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