Peer to Peer lending – still a risky business?

New FCA rules have come into force this week for Peer to Peer lending platforms, designed to protect individual investors and to ensure that they understand the risks involved.

The rules include the introduction of appropriateness tests for new investors and marketing restrictions.  

With recent tales of individuals investing their entire life savings in Peer to Peer fund lending, and with no Financial Services Compensation Scheme protection, time will tell whether these new rules make a real difference.

inexperienced investors will be limited to putting in 10 per cent of their investible assets in P2P, and they will have to be evaluated by the platform operator for appropriateness, assessing their knowledge and experience of this type of investment.