Not upheld: Service failures generally complaint against Zopa Limited

Decision detail

Summary

Mr F invested in Zopa's P2P lending platform for several years. When Zopa announced platform closure in December 2021 due to regulatory changes and market conditions, it sold Mr F's loan portfolio to its parent company at face value, paying him £594,582 including £53,612 for loans in arrears. Mr F complained that he was treated unfairly because he did not receive future interest and bonuses he would have earned had he retained the loans to maturity, and because he was not given the opt-out option mentioned in Zopa's published wind-down plan. The ombudsman found that Zopa had contractual authority to close the platform and that the face value payment was fair, as it provided full capital return including on risky loans in arrears, and that future interest was not guaranteed. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Zopa had the contractual right to end the investment agreement with 30 days' notice under the Investor Principles. While the published wind-down plan stated investors could opt out of loan sales, the ombudsman noted this was a potential strategy rather than a definitive commitment. The key reasoning was that Mr F received full capital repayment at face value for all loans, including those in arrears, which was fair compensation given the heightened default risk on those loans. The ombudsman rejected the argument that Mr F should receive future interest and bonuses, as these were not guaranteed and the agreement had been lawfully terminated. The ombudsman found no evidence of financial gain by Zopa at Mr F's expense and concluded the sale price was reasonable at the point of sale.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website