Missing Capital (from full repayments) Options

[proon]

I sent a similar mail to this to Zopa in mid June, and this message is a repeat... (updated with the June statement information). I've had no reply as yet, so I'm hoping that Zopa will respond. I will report my own post to get attention.

I have been a lender at Zopa since 25 July 2006, and currently I have 175 outstanding loans - with 10 borrowers having repaid in full.

The borrowers who have repaid in full are shown below;

CODE

Loan Date Borrower Repay Date Loan Capital Interest Total %capital
4-Oct-06 joXXXXXXXn 12-Jun-07 £10.00 £10.009032 £0.720968 £10.73 100.0903%
9-Oct-06 hoXXXXXs 2-May-07 £10.00 £10.000705 £0.589295 £10.59 100.0070%
4-Oct-06 mcXXXXX1 27-Mar-07 £10.00 £10.000240 £0.509760 £10.51 100.0024%
20-Feb-07 jaXXXXXXXe 21-Mar-07 £20.00 £20.000034 £0.129966 £20.13 100.0002%
11-Feb-07 doXXXXXe 21-Jun-07 £20.00 £19.999810 £0.400190 £20.40 99.9991%
25-Feb-07 drXXXXXa 21-Jun-07 £10.00 £ 9.999398 £0.200602 £10.20 99.9940%
21-Sep-06 daXXXb 17-Feb-07 £50.00 £49.994290 £1.245710 £51.24 99.9886%
26-Dec-06 miXXXXX0 18-Jun-07 £10.00 £ 9.998612 £0.281388 £10.28 99.9861%
24-Aug-06 JiXXXXXC 5-Apr-07 £30.00 £29.992454 £1.237546 £31.23 99.9748%
21-Oct-06 paXXXXXXXXl 17-May-07 £10.00 £ 9.963960 £0.296040 £10.26 99.6396%

The repayments by doXXXXXe, drXXXXXa, daXXXb, miXXXXX0 and JiXXXXXC are less than the capital, but by less than a penny - although given that daXXXb and JiXXXXXC round down to £49.99 and £29.99 I would have expected them to round
up to £50 and £30 - which would eventually cancel out with joXXXXXXXn, hoXXXXXs, jaXXXXXXXe and mcXXXXX1 who are slightly above the amount loaned, so these are less of a concern.

The one that concerns me more however, is paXXXXXXXl, as the capital repayment is a full 3.6p short of the amount loaned, whilst it is "only" 3.6p, this will soon add up to bigger numbers - and perhaps more concerning is the fact that I will end up paying tax on more than I should.

Please can you confirm for me that the repaid capital should match the amount loaned (rounded up or down as appropriate), and can you please confirm what has happened with paXXXXXXXl, daXXXb and JiXXXXXC as the repayments don't match the amount loaned.

Thanks, Malcolm (zopa username = proon)

[kirklean]

I sent a similar mail to this to Zopa in mid June, and this message is a repeat... (updated with the June statement information). I've had no reply as yet, so I'm hoping that Zopa will respond. I will report my own post to get attention.

I have been a lender at Zopa since 25 July 2006, and currently I have 175 outstanding loans - with 10 borrowers having repaid in full.

The borrowers who have repaid in full are shown below;

CODE

Loan Date Borrower Repay Date Loan Capital Interest Total %capital
4-Oct-06 joXXXXXXXn 12-Jun-07 £10.00 £10.009032 £0.720968 £10.73 100.0903%
9-Oct-06 hoXXXXXs 2-May-07 £10.00 £10.000705 £0.589295 £10.59 100.0070%
4-Oct-06 mcXXXXX1 27-Mar-07 £10.00 £10.000240 £0.509760 £10.51 100.0024%
20-Feb-07 jaXXXXXXXe 21-Mar-07 £20.00 £20.000034 £0.129966 £20.13 100.0002%
11-Feb-07 doXXXXXe 21-Jun-07 £20.00 £19.999810 £0.400190 £20.40 99.9991%
25-Feb-07 drXXXXXa 21-Jun-07 £10.00 £ 9.999398 £0.200602 £10.20 99.9940%
21-Sep-06 daXXXb 17-Feb-07 £50.00 £49.994290 £1.245710 £51.24 99.9886%
26-Dec-06 miXXXXX0 18-Jun-07 £10.00 £ 9.998612 £0.281388 £10.28 99.9861%
24-Aug-06 JiXXXXXC 5-Apr-07 £30.00 £29.992454 £1.237546 £31.23 99.9748%
21-Oct-06 paXXXXXXXXl 17-May-07 £10.00 £ 9.963960 £0.296040 £10.26 99.6396%

The repayments by doXXXXXe, drXXXXXa, daXXXb, miXXXXX0 and JiXXXXXC are less than the capital, but by less than a penny - although given that daXXXb and JiXXXXXC round down to £49.99 and £29.99 I would have expected them to round
up to £50 and £30 - which would eventually cancel out with joXXXXXXXn, hoXXXXXs, jaXXXXXXXe and mcXXXXX1 who are slightly above the amount loaned, so these are less of a concern.

The one that concerns me more however, is paXXXXXXXl, as the capital repayment is a full 3.6p short of the amount loaned, whilst it is "only" 3.6p, this will soon add up to bigger numbers - and perhaps more concerning is the fact that I will end up paying tax on more than I should.

Please can you confirm for me that the repaid capital should match the amount loaned (rounded up or down as appropriate), and can you please confirm what has happened with paXXXXXXXl, daXXXb and JiXXXXXC as the repayments don't match the amount loaned.

Thanks, Malcolm (zopa username = proon)

Another interesting question would also be, when loans are paid in full, what happens to the remaining amount seeing as we use 4 decimal places. Brings back memories of Gus Gorman (Richard Prior) in Superman and his salami slicing ways. Bring on the little red sports car.

[zopa_tom]

I sent a similar mail to this to Zopa in mid June, and this message is a repeat... (updated with the June statement information). I've had no reply as yet, so I'm hoping that Zopa will respond. I will report my own post to get attention.

Hi proon, sorry you didn't got a response. Please send the email to me at tom@zopa.com and I'll check it out with Linda, our nice OpsDirector.

[chancer]

this is a known bug in the zopa system

8 decimal places are used by the zopa system but most repaid loans don't even balance to three decimals. i have raised it before, and so have several other lenders on this board, but the official zopa position is to ram their heads hard into the sand and hope it will go away.

here are the capital balances for all of my fully repaid loans, to 4 decimals:

-0.0634
-0.0022
0.0114
0.0014
-0.0021
-0.0073
-0.0039
-0.0026
-0.0015
0.0025
-0.0001
0.0004
0.0017
-0.0015
0.0074
0.0060
-0.0063
0.0113
0.0119
0.0011
0.0033
-0.0064
-0.0033
-0.0029

my worst difference is 6p.

[Peterkins]

Surely the answer is to ignore the downloaded statements, where rounding is obviously worrying some people, and use "My statement" figures.
Doesn't matter if the downloaded statement says borrower ****** has paid 0.01234567 interest this month, what shows in "My statement" is the important figure as this is what has been transferred into the holding account. When, and only when, the borrower makes his final payment and you have all his payments from "My statement" broken down into capital and interest can you properly check the situation and contact Zopa if the figures are wrong.

[proon]

When, and only when, the borrower makes his final payment and you have all his payments from "My statement" broken down into capital and interest can you properly check the situation and contact Zopa if the figures are wrong.

Which is exactly what I (and I assume Chancer) have done. Until the loan is paid in full, and the borrower has become a "non-borrower", the figures are not final.

The capital + interest figures always equal a round figure in pence - zopa bonuses add a complication, but all of the fully paid loans I have quoted above are "non bonus" loans.

Malcolm

[Peterkins]

Which is exactly what I (and I assume Chancer) have done.
Malcolm

I don't think either of you have!

As "My statement" was only introduced at the end of January, and I assume those of your borrowers with a loan date in October and September made a payment in December, you cannot have got figures for these from "My statement".

And for your loans with a loan date in February, have you kept details of capital and interest for all their payments from "My statement" (i.e. NOT the downloaded version). If you have, what did they show?

[chancer]

sorry peterkins, but my statement was backfilled with all transactions from the beginning of time

i have used the data from my statement, which is why i have the figures to 8 decimal places. the only thing missing from my statement is the initial loans where the loan was fully repaid before february but i managed to get this from Linda


here is the data, FROM MY STATEMENT, for borrower 'Da*****g':

14-Sep-06 Loan disbursal -80.00000000
14-Sep-06 Loan disbursal -100.00000000
21-Oct-06 Capital repayment 2.51069913
21-Oct-06 Capital repayment 1.99564697
24-Nov-06 Capital repayment 2.52114903
24-Nov-06 Capital repayment 2.00847000
20-Dec-06 Capital repayment 2.53560135
20-Dec-06 Capital repayment 2.02061104
22-Jan-07 Capital repayment 2.48538951
22-Jan-07 Capital repayment 1.96505519
22-Feb-07 Capital repayment 2.57294094
22-Feb-07 Capital repayment 2.04415434
09-Mar-07 Capital repayment 87.33939105
09-Mar-07 Capital repayment 69.93750967

Balance -0.06338178


now do you believe me?

[Peterkins]

sorry peterkins, but my statement was backfilled with all transactions from the beginning of time

i have used the data from my statement, which is why i have the figures to 8 decimal places. the only thing missing from my statement is the initial loans where the loan was fully repaid before february but i managed to get this from Linda
here is the data, FROM MY STATEMENT, for borrower 'Da*****g':

14-Sep-06 Loan disbursal -80.00000000
14-Sep-06 Loan disbursal -100.00000000
21-Oct-06 Capital repayment 2.51069913
21-Oct-06 Capital repayment 1.99564697
24-Nov-06 Capital repayment 2.52114903
24-Nov-06 Capital repayment 2.00847000
20-Dec-06 Capital repayment 2.53560135
20-Dec-06 Capital repayment 2.02061104
22-Jan-07 Capital repayment 2.48538951
22-Jan-07 Capital repayment 1.96505519
22-Feb-07 Capital repayment 2.57294094
22-Feb-07 Capital repayment 2.04415434
09-Mar-07 Capital repayment 87.33939105
09-Mar-07 Capital repayment 69.93750967

Balance -0.06338178
now do you believe me?

No - this is NOT data from "My statement" (i.e. the new screen that you can view when going through "My lending"), it is data from the downloadable version. I always use "" when referring to, in this example, a screen of data.

You are talking about the downloadable data in order to see eight decimal places, and what I'm trying to get across is that using this to show that capital repayments don't equal loan amount is a waste of time.
What is important is not that you received 87.33939105 on 9th March but what appeared on "My statement", be it £87.33 or £87.34 or whatever. I suggest this is the only amount you should be interested in as this is what is transferred into you holding account!
And on 21/10 you didn't receive £2.51069913 into your holding account, but probably £2.51 with the balance carried over.

So I say again, until someone has a complete set of payments from "MY STATEMENT" for a fully paid loan, and can then show total capital repayments don't equal amount of loan, should we be worried.

You haven't actually received £99.98......, for a completed loan but (hopefully) £100. At present, nobody knows the answer.

[Ledney]

I have had about 40 loans repaid early, for all of them I have received more in total than I lent. I haven't checked the split between capital and interest. Overall my income from all of my loans seems about what I would expect.

I am happy to let Zopa look after the detail as I do with all other investments. When interest rates change several times in a year I have no idea if my returns on variable rate products is exactly correct, but order of magnitude it looks OK, so I trust the people paid to do the exact sums.

[chancer]

No - this is NOT data from "My statement" (i.e. the new screen that you can view when going through "My lending"), it is data from the downloadable version. I always use "" when referring to, in this example, a screen of data.

You are talking about the downloadable data in order to see eight decimal places, and what I'm trying to get across is that using this to show that capital repayments don't equal loan amount is a waste of time.
What is important is not that you received 87.33939105 on 9th March but what appeared on "My statement", be it £87.33 or £87.34 or whatever. I suggest this is the only amount you should be interested in as this is what is transferred into you holding account!
And on 21/10 you didn't receive £2.51069913 into your holding account, but probably £2.51 with the balance carried over.

So I say again, until someone has a complete set of payments from "MY STATEMENT" for a fully paid loan, and can then show total capital repayments don't equal amount of loan, should we be worried.

You haven't actually received £99.98......, for a completed loan but (hopefully) £100. At present, nobody knows the answer.

the MY STATEMENT on the site is simply a rounded version of the real statement, which is downloadable. the data on the site is only there for 30 days. are you saying i should take screen shots every week and then paste them all together?


the downloadable statements TIE EXACTLY TO THE TAX STATEMENT that zopa sends out. since they tie to what zopa are reporting for tax purposes, this means that zopa is incorrectly allocating repayments between capital and interest.

[Peterkins]

I appreciate the following loan was paid off very quickly but at least it proves my point (this time).
Haa*****a took out a loan of £20 on 3/5, made a regular payment on 5/7 and paid off the rest of the loan on the same day. The details from "My statement" are:
5/7/07 payment 0.71 (capital 0.50, interest 0.21)
5/7/07 payment 19.50 (all capital)
So I have received back £20 capital and 21p interest, and I'm perfectly happy with that. Everything balances OK.

However I asked Linda (Ops Director) what the figures were going to be on the downloadable July statement when it becomes available and she quoted me totals of £19.99605361 capital and £0.21394639 interest from the two payments. I don't consider I'm £0.00394639 capital short because £20 capital has been paid into my holding account.
However if Chancer is correct that the interest figure used in calculating what appears on our yearly statement for tax purposes would be £0.21394639 and not £0.21, then I can understand tax payers being concerned. As I don't pay tax at all, thid does not worry me.

[chancer]

your example is fine because it is simply a matter of rounding. a difference of 6p cannot be due to rounding.


it looks like your loan was at 7.2%, which is pretty good, but because of the bacs payment lag you only received 6.4%

[Peterkins]

it looks like your loan was at 7.2%, which is pretty good, but because of the bacs payment lag you only received 6.4%

One date I have not recorded is when a loan actually "starts", i.e. when the borrower has appeared on "My borrowers". So although the loan date is shown as 3/5 I don't know from what date the interest is payable. In my example the rate of interest was 8.2%.

I appreciate that the rate is lower is because of bacs payment lag - when will the banking systems drag themselves into the computer age so that electronic transfers take place in one day? (Rhetorical question) One of the banks already does this for transfers between their customers.

[kirklean]

One date I have not recorded is when a loan actually "starts", i.e. when the borrower has appeared on "My borrowers". So although the loan date is shown as 3/5 I don't know from what date the interest is payable. In my example the rate of interest was 8.2%.

I appreciate that the rate is lower is because of bacs payment lag - when will the banking systems drag themselves into the computer age so that electronic transfers take place in one day? (Rhetorical question) One of the banks already does this for transfers between their customers.

Apparently end of the year. The people in Brussels were totally up in arms about this hidden profit made by banks for holdiing payments for between 3 and 5 days and are on the case. What came out of it was that electronic and inter branch transfers should be considered same day transactions and monies available same day.
Think the target date for banks to meet this compliance was wk2 in December but don't quote me on that as it was around this time last year that I read the story.

[PoohBah]

Apparently end of the year. The people in Brussels were totally up in arms about this hidden profit made by banks for holdiing payments for between 3 and 5 days and are on the case. What came out of it was that electronic and inter branch transfers should be considered same day transactions and monies available same day.
Think the target date for banks to meet this compliance was wk2 in December but don't quote me on that as it was around this time last year that I read the story.

For various technical reasons, it is now due to start in the first quarter of 2008, although some banks will be ready before then; only those banks which are signed up to the new system will actually operate fast payments between themselves: payments to and from other banks will still have to go through BACS until they climb aboard.

None of the banks wanted to start operating fast payments until new security precautions were in place to prevent fraud, as fast payments would be a gift to the phishing phraternity. There is still the likelihood that some payments will be delayed for security reasons, as happens at present even in banks which normally operate an immediate transfer between their own customers; this is not for profit (any interest is backdated as if there had been no delay), but to allow time for online banking frauds to be spotted.

[CoogarUK]

For various technical reasons, it is now due to start in the first quarter of 2008, although some banks will be ready before then; only those banks which are signed up to the new system will actually operate fast payments between themselves: payments to and from other banks will still have to go through BACS until they climb aboard.

None of the banks wanted to start operating fast payments until new security precautions were in place to prevent fraud, as fast payments would be a gift to the phishing phraternity. There is still the likelihood that some payments will be delayed for security reasons, as happens at present even in banks which normally operate an immediate transfer between their own customers; this is not for profit (any interest is backdated as if there had been no delay), but to allow time for online banking frauds to be spotted.

My bank has always operated same-day transfers between its own accounts and cash credits. As far as I recall so did my previous bank. Maybe I've just been lucky enough to choose the right ones

This post has been edited by CoogarUK: Jul 6 2007, 09:03 PM

[proon]

The monthly payment (forgetting Zopa bonuses, as I don't have a loan completed including a Zopa bonus) is always an exact amount of pence. Adding Capital and Interest (yes, even to 8 decimal places) give an exact amount of pence.

The problem is the amount of interest, which, as discussed above reflects in the amount of tax paid. Just because one person doesn't pay tax doesn't mean that the inaccuracies can be ignored.

[CoogarUK]

The problem is the amount of interest, which, as discussed above reflects in the amount of tax paid. Just because one person doesn't pay tax doesn't mean that the inaccuracies can be ignored.

In his defence, Perterkins has already acknowledged that one:-

However if Chancer is correct that the interest figure used in calculating what appears on our yearly statement for tax purposes would be £0.21394639 and not £0.21, then I can understand tax payers being concerned. As I don't pay tax at all, thid does not worry me.

However, am I the only one here dying learn why he doesn't pay tax? NO tax at all, Peterkins?

[Peterkins]

In my example the rate of interest was 8.2%.

However as a rate of 8.2% should have given me 21.394639p interest from the first payment with .394639p being carried forward and added to the next instalment, I only received 21p as the loan was fully paid at this point. Therefore the actual interest rate was 8.05%. Another factor reducing APR, or whatever it's called but I suppose other loans might work in our favour and increase actual interest rate by a small amount.