We always say read widely and think carefully before investing. How many people will be fooled or confused by this advice on borrowing risks in peer-to-peer? it's time to get your thinking caps on.
The business news site Minyanville offers this advice as an "education article by FXDailyReport.com about How Risky Is Borrowing Money Online Through Peer-to-peer Lending Site."
"The Consumer Financial Protection Bureau (CFPB) ... have been receiving complaints from consumers regarding loans availed from online peer-to-peer (P2P) lenders. This has raised the question as to the amount of risk associated with borrowing from online lenders.
"With customers reporting that they are able to save some money the problem was to identify the risk that was involved with P2P lending.
"Whereas most of the genuine online peer to peer lenders investigate well before lending the money, for the borrowers that get paid instantly, it is easy for them to end up spending the same unwisely."
Any alarm bells ringing, gentle reader? There should be! These are not the risks of borrowing money; they are the risks of lending it. If somebody applies for a loan on a peer-to-peer lending platform, then spends it and can't pay it back, this creates a problem for lenders.
We could go on. For the time being, let this serve as a warning to think critically about everything you read, and don't just nod along going 'Yes, Yes.'
Update: 3rd October
In a more informative (and also much better written) article, Peer2Peer Finance News tells us that "Borrowers lack the financial maturity to understand debt." Thank you. That makes more sense.