Is Grupeer Another Peer-to-Peer Scam?

Yeah, this again. After an upset back in January 2020, when Envestio scammed investors out of their money and I lost a relatively small sum of €472. Now it seems very likely that Grupeer is going to join the list of fraudulent Peer-to-Peer platforms.

I was dismayed by a text message I got at the start of April, suggesting that Grupeer was another peer-to-peer lending scam. I was actually surprised and thought it must be a mistake because, weirdly, this was a platform that I thought was trustworthy. My mistake.

Grupeer Scam
Notice displaying on my Grupeer Dashboard

Grupeer is Hiding Behind the Coronavirus

The timing of this is giving Grupeer a suitable cover story as to why they are not responding to investors. However, I feel this is just a delay tactic and I am sure they are still signing up new, unwary investors. 

They have reportedly shut up shop and ceased all payments due to the coronavirus. You can read this article for a full overview of the situation and recommendations on what to do if, like me, you had funds invested with Grupeer.

From my own standpoint, I made a withdrawl of €285.80 from Grupeer on 3/4/2020 and there is still no sign of it. In contrast to this, I have made two withdrawals from Mintos and two withdrawals from Viventor in April. All four of these withdrawals were processed and lodged into my bank account within a few days. So despite the lockdown, two other platforms I invest in are still operational. And this is at a time when many investors are looking for liquidity. 

As of the time of writing this, the Grupeer site is still live. I can log in and view my balance but apparently that is just numbers on a screen not euros in a bank account. 

So Again, What's the Damage?

My second burn with peer-to-peer investing is potentially going to cost me more than my first. As I mentioned, I lost money with Envestio in Januaray 2020, my Grupeer account was larger. 

 

Grupeer Account Value

0

Have I lost all hope with Peer-to-Peer?

I know I said this before, but it could have been worse. There are plenty of other people who have lost much larger amounts. And one of the reasons it was not worse was that I started moving cash out of Peer-to-Peer over the last few months? Why? A deposit for a property. 

Over the past few months I was steadily reducing my position in Peer-to-Peer from over €12,000 to just over €6,000. All that cash got funnelled into the credit union for a deposit on a second property (more on that soon, still trying to get to talk to someone in Bank of Ireland right now). 

Also, I have to remind myself that all investing is a risk. All the money I put into Peer-to-Peer is money I can technically afford to lose. I knew how risky an investment it was when I started and I did it anyway. Regardless, I have a secure job and a roof over my head. And I have food in the fridge, even if I had to join a queue snaking around the car park at Lidl just to be able to buy the food. 

So, What's Next For me and Peer-to-Peer?

Dunno. Confusing times, you understand. But I guess the best plan I have is to continue to withdraw money from my peer-to-peer accounts (If I can, pending the current apocalypse)

I will probably leave a balance of €1,000 in Mintos because (and this is entirely based on feeling rather than any evidence) they seem like the most secure platform. And there you have it, evidence that I am a bad investor. Basing a decision on feeling rather than research. The other consideration I should have here is the fact that we are experiencing a serious economic event – and the fact remains, most peer-to-peer platforms have not been tested by a recession. 

I don’t know about you, but this meme really sums up how I’m feeling since new year. 

Don’t get me wrong though, I have been doing plenty of other positive things in 2020, and at the end of the day, everyone I know is safe and healthy. That’s good to know. 

Update - 30th April 2020

Grupeer have updated their blog with a new post detailing  a two-year time frame to return to normal operations.

I still find this hard to swallow as all of the other peer-to-peer lending platforms I use have been sending out regular updates throughout the pandemic. Grupeer has been reticent by comparison.

In the article they are pinning all their woes (which, in reality, is investor’s money) on Covid-19. They do not address the issue of withdrawals of non-invested funds which, to date, have yet to resume. I am still waiting on a withdrawal I processed at the start of the crisis. Time will tell.

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