Not all P2P lending companies show enough information for us to estimate their bad debts accurately, nor do they provide their own forecasts.
We can understand why they might not do forecasts, especially for new P2P lending websites, as we wrote in Are Bad-Debt Forecasts Misleading?
However, it leaves us at 4thWay® in a bit of a pickle, because quite a few rows in our detailed comparison tables are based on bad debts or bad-debt forecasts:
How we account for this in the comparison tables
Here, if we are missing key bad debt or forecast information, we currently deduct heavy penalties from the interest rates. This can be five to 10 percentage points for developer loans or 20 percentage points for high-risk consumer loans.
These deductions might turn out to be unfair most of the time, but with a lack of history, data or information it pays to be particularly cautious.