Advice to invest in peer-to-peer lending may now be covered by FSCS

14th April 2016

FSCS may be able to compensate eligible investors in relation to unsuitable advice they receive about the merits of investing in peer-to-peer lending via loan-based crowdfunding platforms.

Depending on individual circumstances, FSCS may be able to provide compensation of up to £50,000 in relation to investment advice. 

Peer-to-peer lending sites have been regulated by the Financial Conduct Authority (FCA) since 1 April 2014.

A peer-to-peer advice claim would need to meet all of the following criteria:

The particular peer-to-peer loan agreement will also need to meet the requirements for the FCA to consider it to be a ‘P2P agreement’, which will depend on individual circumstances.

FSCS does not provide compensation in relation to loss caused by bad investment performance. 

Further information:

FCA Policy Statement

Q&As about investments