Friday 8 May 2020


I’m not sure if it’s the COVID-19 lockdown affecting me, or whether this is really a thing, but over the past month or so I’ve started to really notice companies stretching their take on integrity.  Maybe I was just in a bubble before but for me if you don’t have integrity I don’t want to be anywhere near you.  Let’s look at a few examples that I’ve personally come across.

BT this week published their 4th quarter and year end results.  Within that were these pearls of wisdom - "In order to deal with the potential consequences of Covid-19, allow us to invest in FTTP and 5G, and to fund the major 5-year modernisation programme, we have also taken the difficult decision to suspend the dividend until 2022 and re-base thereafter.”

Now I know that lots of businesses are currently doing it tough but I just cannot see how BT can be worse off because of COVID-19 given we are currently in a world where the majority of communication can only be done via telephone or electronic data transfer.  My view, without having any knowledge of BT, is that the COVID-19 situation is just obfuscation from the fact that the board can’t figure out how to set pricing and manage their cost base to enable investment to stay competitive and give some cash back to the owners of the business.

I also take issue with term “re-base”.  It’s cut or reduce.  I’ve never heard anybody say I’m going to “re-base” my grocery bill.

Fortunately, other than in my FTSE100 tracker, I don’t own BT.

RateSetter is another.  When I first started investing with them they had products called 3 Year, 1 Year and Monthly.  Since then they’ve moved away from that model and amongst a few new products introduced a product called “Access”.

Given the current climate it’s no secret that P2P lenders are doing it tough.  I can accept that it’s so tough that lenders like me might start taking capital losses or even lose the majority of it.  After all with peer-to-peer it’s always stated that “capital is at risk”.

The bit I can’t accept is the obfuscation and RateSetter have two nice examples:
  • As many are now finding out “Access” is anything but accessible.
  • To try and manage the difficult situation they have halved the interest everybody is receiving on their lending.  I get it.  Better that everybody gets all/most of their capital back rather than haircuts beginning.  The bit I can’t accept is how they are still advertising the going rates at the pre-halved levels.

RateSetter was a company I’ve written about a few times and I personally still have over £50,000 with them as I felt they were one of the better ones but I’m now out.  I’ve asked for some investments to be released which may or may not ever happen and the rest will be extracted as the loans fall due which should mean I’m done with RateSetter within a year.  It will be interesting to see how much capital is actually returned.

My final example comes after Mrs RIT asked me what seemed like a very simple question.  How much would the fees be if somebody in Country X paid me this much money via PayPal?  It sounded like a really easy question until I stumbled upon the PayPal ‘Consumer Fees Menu’.  I mean really a ‘Consumer Fees Menu’.  In the end I couldn’t figure it out which must mean yet more obfuscation as while I’m not the sharpest knife in the drawer I’m also not the bluntest.  In the end I gave up and answered with can you do it any other way as the fees are going to be significant.

Is it just me or is integrity starting to be stretched during these difficult times?
If you think it is being stretched do you have any examples of your own?


  1. There is a lot of this going on. The pandemic is providing top cover for implementing change and doing unpopular things. It is a lot easier to ignore a few strongly worded emails from disgruntled locked down staff than it is to cross a picket line or shut out a noisy protesting mob outside the office.

    How many of those 20% "temporary" pay cuts will be rescinded once the pandemic passes? As people get used to the lower salaries and day rates, they become the new market rate. Similarly, despite assurances to the contrary, the thinning out of the workforce that has occurred won't suddenly reverse, as bloat tends to gradually creep in during the good times.

    The other bad behaviour I'm seeing a lot of is opportunistic price gouging. For example, the cafeteria at the local hospital has been closed. Immediately the few remaining local coffee shops increased their prices, then offering NHS workers a "discount" back to the original price levels.

    1. As an example our grocery bill is through the roof. Part of it is no eating out, the good but lower priced alternatives not always being available in store and no in store discounting but it can't be just that given the increase. I'd say there's some price increases as well but I don't track spending at that level. Whether that's gouging or inflation from things like our weak £ I couldn't say.

    2. How is eating out part of your grocery bill ? Not like you RIT !!

    3. By not eating out those meals are substituted by grocery spend.

      I don't think I've ever said we don't eat out and our entertainment budget speaks to that. I think it's always been about just spending on what brings value.

      For example we have a great local cafe near us. Packed in like sardines, fantastic food and at a great price. The value we get is the banter between the punters/staff. It really is great fun in moderation.

    4. You misinterpreted my " facetious " comment . I thought you had made a mistake ! - but I was wrong .

    5. Apologies, I've lost a bit of my sense of humour over the last few weeks... Glorious weather but even with that my usual positivity has been a little dampened.

      You've now reminded me of an old joke though - I thought I was wrong once but I was mistaken :-)

    6. We've seen a simailar increase in grocery costs. I'm a naturally born cynic so it's probably just me, but I'm sure in cutting the number of lines at our local supermarket they've taken out the lower cost products. Dishwasher tablets was a good example yesterday.

  2. Always enjoy your postings and I'm completely with you on integrity and, being I'm guessing a bit older than you, I do remember a time when we even required it of our politicians!

    My wife and I were doing a bit of research on Shapps (our minister for transport) who was on Question Time the other night and was not too impressive and we came across this on his wiki summary:


    Shapps's use of the names Michael Green and Sebastian Fox attracted controversy in 2012. He denied having used a pseudonym after entering parliament and, in 2014, threatened legal action against a constituent who had stated on Facebookthat he had. In February 2015 he told LBC Radio presenter Shelagh Fogarty, "Let me get this absolutely clear ... I don't have a second job and have never had a second job while being an MP. End of story."

    However, in March 2015, Shapps admitted to having had a second job whilst being an MP, and practising business under a pseudonym. In his admission, he stated that he had "over-firmly denied" having a second job.


    Now I appreciate the wiki isn't necessarily gospel but - at face value - I'm completely at a loss as to what it takes in terms of a lack of integrity to actually end a political career these days when bare-faced lying is reduced now to just "over-firmly denying"!

    I don't suppose such politicians will be much good at holding businesses to account.

    Keep searching for integrity, it is of huge value!

    And good luck with your plans.

    P.s. Sadly I have more BT in my portfolio than I'd like having missed getting out early as the Italian fiasco developed. But on the plus side I've never been "brave" enough for P2P lending having worked too close to the sub-prime advocates in the noughties.

    1. "over-firmly denied". If that is true it's so sad that this is what the world is turning into. I always thought the word deny was so self explanatory that it didn't need a caveat. I guess you learn something new every day.

    2. I noticed the " over-firmly denied " as well. Is he trying to pass off / wriggle out of a full blown tie and try to turn it into a white one ?

  3. The global pandemic has clearly exposed the fragility of our financial systems and economies. Many large companies as well as governments have relied on high borrowing and now seem to think borrowing more will see them through the crisis.

    I think this will be a watershed moment and I suspect many of these companies will not recover. I suspect the next couple of years will see a shake-out of these debt-ladened unsustainable businesses.

    Hopefully we can take this opportunity to build back better where the watchwords are prudence, sustainability and integrity. The fragile financial system has been propped up by the central banks in the short term to cushion the reality that is just around the corner.

    As they say, it going to be's not difficult to work out who the big casualties will be.

    1. A big thumbs up to "prudence, sustainability and integrity" from me. I wonder how many companies in the world truly practice all 3. I can't think of one off the cuff.

      BTW I am so inspired by watching what you've done around sustainable investing. An inspiration. I try to live sustainability (I use the words tread lightly on the planet) and moving forwards want to do more and more but I'm the first to admit that my tracker approach to investing is a mile from sustainable.

    2. Fatbritabroad9 May 2020 at 22:50

      Our parent company came out within a week and guaranteed jobs and pay. In contrast our major competitor cut staff pay while the exec board took 50 % reduction (token gesture given they earn most of their remuneration by bonuses and share awards imo) but carried on paying their dividend. Bad message imo

    3. Thanks RIT and good to hear you are treading lightly!

      I agree that currently, mainstream index funds are not compatible with the challenges of addressing the climate emergency. That is why I gave up on the passives last year and moved to active. For the time being it seems the only way to align my values and investing strategy and maintain a degree of integrity when discussing these issues with my grandchildren.

      Hopefully this pandemic will be a turning point and an opportunity to re-think what we value going forward.

  4. As a retired private investor I don't claim any " inside knowledge " But I think your views on BT might be a bit blinkered. It is a global technology and service company in a rapidly developing and changing sector - with increasing competition worldwide. There are likely to be many business failures ( which will happen quickly ) new businesses will mainly take a bit longer to get going . So BT will be losing some of its customers in the near future , will have redundancies , premises to reconsider , networks to invest in 5G . I have not looked at BT's accounts so these comments are a bit off the top of my head.

  5. The world has already changed and will change a lot more as a result of Covid. The companies and businesses that survive will be the ones who embrace this and see it as an opportunity to increase market share , explore new markets , change management structures , maybe reduce redundant office space due to increased home working, invest more in their remaining workforce but try and pay them less ( threat of becoming unemployed ) Suddenly some companies will realise that they can use their profits more productively by re-investing rather than distributing it as dividends , share buybacks etc. Maybe this will herald a significant switch away from short termism which would be a very welcome relief and a sign of a better future ( deliberately vague phrase )

    1. Good point. On that I heard a comment this week that rang true. It went something like "The world has not permanently changed because of COVID-19. The change was already happening and COVID-19 has just accelerated it."

  6. Are you sure that the remaining duration of your Ratesetter Accesss portfolio is under a year? I do hope so but when I look at my own the remaining loan term is between 1 and 57 months. My understanding is that the change occurred when Monthly became Accesss and those loans that used to be repaid in full each month and reinvested at prevailing rate were automatically reinvested at the terms at inception. Result: borrowers knew the rate for the full term of their loan (good), lenders took on duration risk in exchange for the potential of improved liquidity according to the company (?). I'd love to be corrected on any and all of this..

    1. RateSetter is no longer what I initially invested in but that's my fault for not keeping up. I should have continued to DYOR as things started to change. It's the products, the loan types, the T&C's and I have a real problem with the obfuscation. I still highly value trust and if I can't trust you I can't do business with you even if clause allows you to do what you are doing.

      98% of mine is in the old 1 year market where I have my reinvestment settings now directing to my Holding Account. I then manually withdraw what is sitting in there periodically. That seems to be working.

      The 2% is in Access where I've requested a full release. I don't expect to see that for a long time. If I have to wait for the borrowers to (maybe) payout the longest loan period for me is 3 years. As you don't seem to be able to direct repayments into your Holding Account (why would you want to do that given it's an Access product [sic]) I've just set the reinvestment percentage as high as I can hoping I don't get auto reinvested as borrowing is paid which should leave it On Market. Reinvesting it would be a disaster as then I'm at the back of the payout queue again which may never come. My hope is that I should then be able to withdraw that periodically as well but I'll find out in a bit under a month.

      Are you trying to withdraw or are you riding it out?

    2. I feel the same. There have been so many changes with and without notice to investors that how can anyone have confidence in anything stated as the terms of a loan or the functionality of the website? There is a concern about the platform if they don't declare actual returns to new investors, actual liquidity estimates to current investors and proportion of lenders trying to leave the platform to borrowers.

      I'm trying to reduce as well. Have also done the high interest workaround because returning to Holding Account is not an option. Unfortunately a workaround isn't a great alternative to being a respected financial platform.

      I'm currently withdrawing all repayments when they become available and this works NOT to force any other sales to meet living expenses. Grateful for that.

      Hope it all goes well for you and your family. Thanks for this thoughtful post.

  7. Gosh at one point I had over 250K in P2P now I have zero, about 2 years ago it occurred to me that most loans are as dodgy as #uck. Lots of crap. That money is now in cash earning a little over 1%, i know it wont protect me against inflation but it limited my losses in the recent crash.

  8. As a former lending banker (retail, commercial and corporate for my first career up to 2006) I have never involved myself in P2P. Why on earth would I want to lend to people who could not get a loan from their own bank. As for the facilitators; what do they know about credit underwriting? Hope you all get out without major losses.

  9. The other major integrity stretch I've seen is travel firms. Not the lack of immediate refunds aspect, that's actually quite understandable. However, many were/are still taking bookings for holidays they know are very unlikely to take place. Until recently, TUI were offering holidays from mid-May to places in full lockdown like Spain, under the tenuous argument that the end date of the state of alarm was before the holiday commenced. Really poor practice.
    Re: P2P, I've probably done far better than most, because I feel I latched on to the idea that it is far more of a game than an investment. Most profits are to be made at the expense of your 'peer' investors rather than the quality of the loans themselves. Knowing when to exit an investment is far more about sentiment than fundamentals ( I RYI'd on Ratesetter on the 'black' Thursday when the stock markets tumbled). That said, it's questionable whether it ever was a game worth playing. I certainly had a few close shaves - definitely not somewhere to put significant chunks of money IMV!

  10. Travel and holiday firms either refusing to refund cancelled holidays and rentals or issuing credit notes and time-limited vouchers instead of refunds spring to mind, but the award for the most breathtaking integrity failure must go to insurers who provided business continuity insurance to small firms and are now refusing to pay out, for completely fabricated reasons. I used to have professional indemnity insurance with Hiscox, but now I wouldn't touch them with a virus-ridden bargepole.

    Policy wording states that policies cover 'inability to use the insured premises due to restrictions imposed by a public authority following an occurrence of any human infectious or human contagious disease'

    Pretty black and white, no? But Hiscox are denying claims from businesses forced to close by Government restrictions on the grounds that ' a pandemic is not an occurrence', 'the disease has not actually been reported at your premises','there has to be an instance of the disease within a 1 mile radius of the premises'

    Etc, etc. Small wonder they face a class action from business owners whose policies are their only chance of survival.

    1. Fatbritabroad9 May 2020 at 22:57

      Yes I work for a commercial broker and we're taking legal advice on behalf of hiscox clients (and others that have similar wordings). Its a shame as hiscox were one of the better insurers for keeping their promises and paying out even when they strictly shouldn't. I don't have alot of good to say about the fca but their move to get a legal ruling seems smart to me. At least each side will know where they stand

  11. I've never really understood the logic behind allocating what's meant to be the most defensive side of a portfolio to what is essentially junk debt.

  12. Pops321 here.
    I have always been cynical of big business having worked for a Top FTSE Finance Company for 33 years. Whilst it is incredibly customer focused that is because it is sensible and pays to be so....however, the dividend and share price would always be a driver. Infamously I once said that if it were profitable and would benefit the share price then we would shoot all our customers and keep their money and the only reason we did not do that would be due to litigation and bad press.

    Another element of my distrust is the debt they carry. Virgin Atlantic doesn't own planes it leases them in fact many companies have little material assets and share price is only 'potential earnings' because they have sold and paid out the family jewels already.

    Big company directors haven't taken all the risks and set up companies themselves but are overpaid employees. They don't want to leave a ''Joseph Rowntree'' type legacy (they lack the vision) they want to leave the business in a reasonable state to ensure their personal reputation isn't too damaged and take out £40m over 5 years and move on or take things easy.

    Too many in it for the relative short term and owners, employees and real vision just get in the way.

  13. Wandering Star17 May 2020 at 23:15

    BT are losing subscriptions from BT Sport because sport is cancelled. Also the lower yields on gilts mean their already substantial pension deficit will need more cash throwing at it.

  14. Pops 321 here....this is the quietest you have been for such a long period. Are you ok? How are your plans unfolding?

    Seems like houses and stocks are booming, many are enjoying a sabbatical in the sunshine and even more are eating out to help out. Nothing can go wrong....except of course the reality of impending economic hardship many seem ill equipped to deal with. I am watching and waiting.....

  15. Pops321 here.
    How is your planned move have been quiet.
    How is it going and hope you are well

  16. Hi RIT,
    Lots of people on Monevator threads have been wondering if you're doing OK. I hope that you are. FWIW, I'm sure the weird and wonderful UK FI community would love to hear how you're getting on.

    The Accumulator

  17. Hi RIT - it's 12th Oct so " we " haven't heard from you for 5 months.

    I realise that any post you may make in the near future will be hard for you .

    However - your followers seem to galvanise themselves into a more realistic attitude and approach to their own lives and investments as a result of your analyses and disclosures.

    A problem shared is a problem halved .

    If it is of any help - my assumptions of your current situation are as follows ( but I hope they are more wrong than correct )

    You are back in full time work , your FIRE plans now on hold and the near future sees you in the UK for sometime longer .

    Algorithms , predictions and analyses have all been re-based in this new Covid ( too early to call it a post-Covid ) world and future income expectations from equities seriously revised down.

    But everyone needs a dose of reality - and that applies to our current lives even more than our current investments.

    What risks are we taking personally ? - are we reducing our exposure or increasing it by going out more , eating out more and even going to a cinema or a theatre -type broadcast of a live performance ? We still have some personal freedoms to make these choices depending on our own situations. We spent 12 weeks of lockdown shielding - which was strict and severe - but joy came from the great weather and a huge amount of gardening that our new house desperately needed. Hope all is well - and please ignore this at your discretion . You have your own life to lead and owe your followers nothing .

  18. long time no post on the website . Anyone know what RIT is up to ?

  19. Pops 321 here....are you still out there?

  20. Wondering how you are getting on RiT? Well I hope, and taking advantage of ralleys and dips?

  21. Dear RIT,

    Friday, 8 May 2020
    I’m not sure if it’s the COVID-19 lockdown affecting me, or whether this is really a thing, but over the past month or so I’ve started to really notice companies stretching their take on integrity. Maybe I was just in a bubble before but for me if you don’t have integrity I don’t want to be anywhere near you.

    Your own integrity has been severly compromised in my view due to your disappearance from " public " view . Come on- Man Up and tell us what is happening to you and your family. What choices and decisions have you already made ? and what ones do you still hope or intend to make ?

    Many of your followers must by now be seeing you as a failure - and that you cannot face up to or admit it.

    It is my sister in law's funeral today ( unable to attend ) , my wife's cousins funeral tomorrow ( also unable to attend ) ,my older daughter ( secondary school teacher ) heard yesterday her classroom assistant has Covid ( last contact 5 days ago ) and my other daughter's partner has had a heart transplant. So - we are all urting in different ways - you are not alone - and you may find your blog can give you much more support than you might think . Happy Christmas.