I’ve written about what I consider to be the best P2P lending platforms at the moment for investing, however after the debacles on various other platforms during the past few months, people have been reaching out to me to ask about which platforms they should not trust.
I think it’s a good idea to list which platforms I actively avoid so you can do your research about them and potentially avoid them as well. I’ve had the idea to write this post for a long time but I originally wanted to write a longer post about each of these platforms to explain my reasoning. Until I have the time to do so, I’ll just list them and try to describe in a line or two why I don’t trust them.
Platforms that were in the original list and eventually went bust are marked with a strikethrough.
- Nordstreet – complicated to link up your bank account; you need to first open a Paysera account.
- Fast Invest – funded by an ICO and too much focus on the founder’s story, which I don’t find believable anyway.
- Housers – no due diligence on their projects and a murky fee structure along with many loan projects that were never concluded. As close as a scam as you can get without technically being a scam. Currently being investigated by the police in Spain.
- Crowdestor – little due diligence done on projects, leadership does not inspire much confidence, clearly on a downward trend towards its eventual demise.
- Quanloop – similar team to Bondkick – apparently a failed ICO project that did more or less the same thing that Quanloop is doing. I don’t have strong negative feelings against this platform, but it’s too early to recommend it.
Wisefund– sparse information about the projects they are funding.TFG Crowd– Sparse info about the managing team as well as being based out of coworking spaces. Not a serious financial platform.Iban Wallet– Very shady details uncovered about the company. Stay away unless they come clean.Dena Invest– all the indications of a “me-too” scheme with owners having no relevant experience.Grupeer– people have provided evidence of scam practices by this platform, active lawsuits are underway and interest payments have been frozen.Boldyield– not convinced about their way of measuring LTV, and I’ve had negative experiences with a similar platform in the past (Lendy).Monethera– shady buyback guarantee.Kuetzal– seems to be a scam.Envestio– featured several dubious projects in the past, although things seem to be improving lately.Agrikaab– ridiculous and obvious scam.
Hopefully, I’ll have some time to write about the platforms mentioned above in more depth at a later stage, if they survive till then.
There are some other platforms that I don’t necessarily think have serious management problems or are scams, however, I do avoid them just the same as I don’t think it’s worth the time and hassle to invest in them.
Lenndy is one such example. They are small players in the business and show no signs of catching up with platforms like Mintos nor are they offering anything innovative compared to the top players. I, therefore, see no reason to invest in them.
Bondora is another platform that is hated on by many investors, however, I’ve gotten decent and stable results over the years, which is more than can be said about most of the platforms on this page.
Do you agree with my choices? Let me know if there are other platforms you actively avoid investing in and why.
The P2P Platform Graveyard
Several P2P lending companies have gone bust over the past years. Here’s a list of them:
- Viventor (2023)
- IbanWallet (2023)
- Wisefund (2022)
- TFGCrowd (2022)
- Dena Invest (2020)
- Grupeer (2020)
- Boldyield (2020)
- Monethera (2020)
- Envestio (2020)
- Agrikaab (2020)
- Kuetzal (2019)
- FundingSecure (2019)
- Lendy (2019)
- Collateral UK (2018)
What’s your prediction for the next one to join the list?
So far I’ve lost money on Lendy. It was one of the first platforms I invested in, and since I didn’t know much about lending at the time, I luckily had the good sense to only invest a relatively small amount into the platform. It is now in administration and there is hope for some recovery of the debts, but I will lose part of my investment there. The owners of this platform sent millions of GBP to their accounts in the Marshall Islands and drove the company bankrupt. It’s one of the first big scams in P2P lending, and the fact that the platform was fully licensed in the UK should show us that being licensed does not mean that everything is rosy at a platform.
Overall the net result from investing in P2P lending platforms is still very positive, and that is what matters since we all know that these are relatively high-risk platforms in the first place, and there are bound to be borrower defaults, loan originators going bust and in some cases platforms themselves failing for myriad reasons.
The most important thing when you lose some money is to review what happened, understand what lessons can be learned, and move on. All investors lose money at some point, but as long as you’re right about your investments most of the time you will make money. It’s important to understand the concept of risk in investing and make peace with it right from the start.
Faced with the pain of losing money, many investors throw in the towel and write off investing altogether, but this is a mistake. As humans, we are wired to feel much worse about losing something than about gaining something, so you need to understand the psychology of risk and reward and push beyond it to continue learning and investing because it’s the only way to become a better investor and ultimately make serious money in the long run. Remember that if you’re not investing, your money is actually losing value due to the effects of inflation.
If you’re just starting and you’re feeling that the prospect of investing in P2P lending is daunting, you might want to check out my tips for evaluating P2P lending platforms as in that post I’ve shared all the lessons learned along the way and my criteria for deciding whether or not to invest in a platform.
A note on Trustpilot
Over the years I’ve come to understand that many new investors rely heavily on Trustpilot to formulate their decisions on whether to invest in a platform or not. By default, I don’t trust sites like this and would never rely on them to make up a decision.
I have looked at Trustpilot reviews a few times as some platforms proudly display their rating, but it turns out that several of them are clearly abusing the system. Basically, it consists in posting positive fake reviews while simultaneously taking down bad reviews.
I think the following video fully exposes the uselessness of Trustpilot as a review platform:
Hi Jean, I invested too much money in Grupeer 🙁 Do you know what is going on with them now ? And who is involved in the lawsuits & how I join ? I can’t seem to find much up to date info on the web which is very worrying. Thanks so much for your help, Regards Alex
Lenndy is not to be trusted, I have been waiting for my money since 10th April and after nearly 6 months still nothing, only broken promises…
I have also invested a rather larg amount with Lenndy and wait some news.
Can understand that all investors are waiting for the administration to finalize, but how much longer this is going to take?
Anyone with insight or news?
Hi, in relation to Boldyield it closed, but it returned all my money invested, quickly and smoothly. In 2021 it has reactivated again, I received an email to re-invest. Now they say they are opening in cooperation with Realto. What do you think?
Thanks
Anselm
I wouldn’t risk it. Plenty of other better investment opportunities out there.
Hello! Can you tell me opinion about xeapers.com ? It seems scam, all comapnies who selling stuff in that web hard to find in google
Very unprofessional site. It isn’t even an investment platform though.
I’ll back your story on TrustPilot. A few months ago I tried to alert them about an obvious grifter scheme/website that was supported by painfully obvious fake reviews. I even pointed out the fake profile pictures (thanks Google).
They would not bother. The bots kept asking for a receipt number I was supposedly complaining about. Ridiculous, utter nonsense.
TrustPilot is not to be trusted.
Agreed.
Hi Jean
Stumbled upon your blog – compliment, I love to read your stuff! 🙂
Have you looked into Moncera as of yet? I guess it would fall into a similar category as Lendermarket (Creditstar) with it having one big Loan Originator behind it but no secondary market.
Except that there seems to be an option to immediately cash out with a fee of 0.5% of total investments.
Cheers and a good weekend
Robin
Hi Robin,
Thank you for your compliment. I had not come across Moncera yet. The market is getting a bit saturated these days, and I don’t think I will be looking beyond the platforms I’ve already used and reviewed for the time being, especially given the difficult situation at the moment.
Hi. What do you think about TFG Crowd? Trustpilot rating is 4.6/5. I’ve already invested some and the interest looks good. But I’m just afraid to continue since there are 2 P2Ps which already closed and 1 which, as you already said, probably a scam. Thank you.
I’ve had some interactions with the top people over at TFG Crowd and they seemed legit to me, however, I haven’t looked into them in-depth enough to give you a definite opinion.
Hello thank you very much for your posts they are really helpful.
Im an investor at grupeer as well sadly and things arent looking good.
If grupeer turns out to be a scam they is no way to gain back our funds?
It depends on how it ends up. If it winds down the legal way then it will enter into administration, whereby the appointees will be in charge of recovering the loan principal and interest from the remaining loans on behalf of investors. If the owners just disappear then criminal proceedings will start and that usually takes much longer, and there are less chances of recovering the money. In such cases I always recommend counting your investments as bad debts, and if you recover anything you can consider yourself lucky.
You can join in here: https://sites.google.com/view/grupeerarmada/
Hi, can you give some advice about another new player, what do you think about swaper? Thks.
Hi Paulo, I’ll look into this platform and publish an article about it, probably within the next month.
I have had a bad gut feeling about Grupeer for a long time. There are no delayed loans in my portfolio. And I’m not the only one Grupeer user that has noticed this. No delayed loans is just bullshit, it is very doubtful. What magic formula for selecting LO:s/borrowers does Grupeer have… Congratulations if they have found one but for now, I’m NOT buying it.
Besides, it is very difficult even to find information about possible delays, you have to go to each loan separately. Grupeer website is very basic and immature.
Check this out on Trustpilot (a three-star review, reply from Grupeer Apr 3, 2019): “…In addition, we can assure you, that at the moment none of our loans are delayed.”
Ha ha. Grupeer can you please explain how do you do it.
Hi Julia, I have reached out to Grupeer directly to answer your concerns. Here’s what Olga Novikova, their communications manager, had to say about the matter:
“Grupeer runs a slightly different business model, than some other p2p platforms. We do work with PDL providers and other non-bank loan providers, but what we do is we give a loan to the micro financial organization and do not place individual loans for investment. Of course, the payday loan providers have a high default rate, but we do not pass this risk to our investors: this is a packaged loan that we give to the loan originator, and they internally manage their cash flow, when they face a defaulted loan. Our customers will be affected if the loan originator fails to repay the loan that we have given to them. This is usually done in the form of indirect structure – through Finsputnik and this is visible on the platform for example as “deal partners: Finsputnik/ PlanetaCash”. The different story is with business loan providers, here the structure is direct and the default rates on the business loans issued by our loan originators are very loan, and only safe deals are accepted on the platform, thanks to our due diligence department.”
Looks like you were right about Grupeer Julia. I’ll admit I was fooled myself by this platform, the scammers behind it seem to have done a very good job at portraying the company as a legitimate one until it all came crashing down in the Coronavirus crisis. Let’s see how things pan out in the next few days, but it doesn’t look good.
Hello Jean, Julia,
what happened to Grupeer?
We are awaiting an official statement in the coming days but it seems to be a scam platform.
Uh, not good. Please keep us posted and thanks.
Indeed, will do.
Yes I think it’s now safe to say it was a scam :(! Feel very sorry for myself and the other investors but let’s see if there’s something we can do together as a group… Don’t give up, it’s your money! Grupeer investors can join the Telegram group https://t.me/grupeerdiscussion1 to get/share information about this case. Check the pinned message there 🙂
Hi Jean,
i am an investor on fastinvest (on top of mintos, grupeer and peerberry). Beginning with a smooth start with few loans available now i am able to generate the usual 11-13% and it seems to be a stable platform (although i dont like their autoinvest feature, too confusing). Would you mind sharing more insights about fastinvest and why you dont trust it?
Regarding twinio, do they provide buyback/safeguard or any other protection? do u find it easy to use with a solid autoinvest feature?
Many thanks in advance.
Matteo
Hi Matteo,
I’m glad things are going well for you with the platforms you chose.
As I said in the post, I automatically don’t trust platforms that have raised a ton of money via an ICO. Unfortunately, most ICOs turned out to be scams at worst and free capital for the companies/people issuing them at best. Additionally, I don’t buy into the founder story of FastInvest, as it is quite obvious to me that the young founder in the story did not really build up the platform from scratch, but rather relied on the money and skills of her older husband to do so. In fact, it seems to me that the real story is that of an entrepreneur with very shady previous businesses deciding to take advantage of the boom in P2P platforms and using his young wife’s face as a fresh and cool image for the company. Under normal circumstances, no financial company would be so keen to talk about the founder’s story, especially when the “founder” has no real credentials and experience in the industry. If you notice, most fintech companies try to do the opposite. When talking about their team, they emphasise the experience and qualifications of their top directors, and if it’s a young startup, you will most definitely find a board of advisors consisting of top players in the financial space (typically 40 or 50+ years old) to back up the young founders. You can find a more in-depth explanation in my review of FastInvest.
I do find Twino easy to use and they have a payment and buyback guarantee too.
Under the BuyBack Guarantee investor protection scheme, TWINO will compensate the investors both the invested principal amount and interest, as well as pay the accrued interest in case a borrower is late with the repayment for over 30 days.
Under the Payment Guarantee investor protection scheme, TWINO will compensate both the invested principal amount and earned interest as per the original loan repayment schedule, even if the borrower is late with the repayment. The Payment Guarantee applies to the whole duration of the loan.
Loans with the Ratings A, B, C are not covered by the BuyBack or Payment Guarantee.
thanks!
Have you looked into Monethera yet?
I’m in for a little test €100 per project since last spring. All payments arrived on time so far.
I have looked into Monethera a bit over the past few days. It looks like a small platform when compared to other major players in the space. I haven’t noticed anything that stands out to me as being of any concern, except a few spelling mistakes here and there.
It’s a positive sign that all payments have arrived on time for you, but unfortunately, that can’t be taken as a sign of long-term sustainability. It’s basically the very minimum hurdle that every new platform needs to jump over, but I don’t know of any platform that failed to return payments on its first projects. The problems always arise later on in the platform’s life.
Monethera promotes many projects that are quite unrelated to each other, and are in completely different industries. I have serious doubts about whether any investor is capable of truly analyzing these opportunities and investing in an informed way. Failing that, you’re at the mercy of the due diligence that is done by the platform, and hoping for the best. I don’t think that’s a clever way of investing.
I think many new investors are excited by being invested in so many diverse projects, especially when the first payments start coming in and everything seems to be working. However, I am still not convinced that this is responsible, intelligent investing. Happy to hear any thoughts to the contrary though.
Interesting. I have Monethera on amber (proceed with caution) I am in a few projects but like the poster above only €100 a project and half a dozen projects. No more being added for time being. I think the ongoing Kuetzal situation has been a wake up call for everyone.
Nice blog.
Ivor
Thanks Jean. Agree with your thoughts. How about Monethera?
I haven’t looked at Monethera very closely Steve, so I can’t comment on that. Will take a note to look into it and report back.