Setting the record straight on our crowdfunding round


#198

And I don’t think that’s ethical.

Its one thing to ban crypto because of how easy it is to get tied up in crime, but if you think your customer isnt responsible, you shouldn’t lend to them in the first place.


#199

I am unable to comment on the article as it is behind a paywall https://www.thetimes.co.uk/article/38487b5c-f41e-11e8-8c84-29b2667b0b46 - however, I do have very strong opinions on the house giving credit to the gambler.

Under UK law, “land-based bingo and casinos may not offer credit for wagers.” - essentially, an investment in Monzo is a wager. The whole thing is a gamble.

I am certain I read on https://monzo.com/invest that it was possible for customers to use their overdraft to buy shares (the post has now changed). It did not discourage people from using their Monzo overdraft to buy shares, or come with any caveat emptor that using your Monzo overdraft to buy shares in Monzo is kind of dumb. At the time, I thought this a bit rum… I felt it should either NOT be possible to use a Monzo overdraft, or at the very least contain a big alarm bell.

True - the prospectus and other literature was full of caveats, and warnings and concerns - but this had to be there, it was small print.

It is also true that someone could take a non Monzo overdraft or loan to fund their monzo investment. Monzo cannot stop this - however, by allowing customer to use Monzo provided credit to buy Monzo shares… it has a whiff of old banking about it. Those banks who washed their hands in the bath of laissez-faire and brought about global economic disaster.

I like Monzo because it gives me greater control over my finances. It gives me all the information I need to make informed decisions. It’s not old banking. So from my perspective anything that makes Monzo look a bit like old banking up to old bankings tricks is a little deflating.

The fact Monzo allowed it, mentioned it, and didn’t put any immediate caveat in is a PR stinker. They opened themselves up to criticism.

[ Having read the forums - for many, their first investment has been in Monzo. I too am a novice investor. I did my homework, and have only bought that which I can afford to lose (I don’t want to lose it! - but if it happens, it won’t hurt me or my family) ]


#200

@Bank Nice username. Surprised it wasn’t reserved. :+1:


#201

heh - I was surprised to. I have different user names for every forum I use… back in 1996 or so I used the same username everywhere… it meant people could find me. By '98 / 99, I was prominent in google searches, and it scared the hell out of me - so I binned them all to become anonymous… Pals of mine in digital marketing say I’m an idiot for doing that… but ho hum…


((╯°□°)╯︵ ┻━┻) #202

You can’t hide forever Paul!

I really hope that’s his real name :joy:


#203

Hmmmmm :thinking:

98 was when Google just came to being and it wasn’t very popular. Yahoo, Atlavita and Lycos were more known I believe.

Apologies for being off topic.


#204

Yep - thats right. Began as a research project in '96… incorporated September 1998, and spread like fire through Universities (I started my degree September '98). It gained traction incredibly quickly - it more or less killed Lycos and Altavista overnight… It was the innovator. Yahoo missed an opportunity (Google Search was touted to them)

Now, controversially, I reckon Google’s days are numbered… but to go into why would be very, very off topic…


#205

That’s bold! How many Google shares will you be short selling? :rofl:


(Gareth) #206

Bingo & Casino venues are licensed for the purpose of gaming, and I don’t think Monzo has a gambling floor in their office :joy:

Anyhow, I’ll point out how Monzo describe their overdraft: “ideal if you need a little extra money to tide you over every now and then” & “we’d charge you 50p every day you use it”. It is not described as something to borrow for anything other than short term.
So Monzo saying you can use your overdraft should be interpreted to mean you can invest without worrying about moving money to your account beforehand by using your overdraft, but we expect payment soon.

Honestly, the fact that something generic like The past performance of any investment is not necessarily a guide to future performance. The value of investments may go down as well as up. wasn’t more highlighted seemed the bigger flag to me.


#207

Hah! Alas, I don’t own any. Only shares I’ve ever owned have been in my own businesses… and recently Monzo


#208

But buying shares in Monzo is just like that :stuck_out_tongue: … unlisted shares, not easily traded - and with restrictions upon what you can do with them… extremely risky.

I know how Monzo describe their overdraft - however, they opened themselves up to criticism the moment they suggested people could use it to buy shares.


#209

As I have said before, “overdraft” is not a dirty word. I am not always willing to take savings from high interest pots or sell assets. An overdraft can be an effective tool IF used wisely and I would argue that Monzo provided enough easily accessible information for people to make an informed decision.

Just my 2 cents!


(Oliver Ford) #210

We know that Monzo calls it ‘hot coral’, but I wouldn’t say ‘coral pink’ was a wrong (certainly not facepalm-worthy) description: https://en.wikipedia.org/wiki/Coral_(color)


#211

It’s never pink… so yeah I’d say it’s wrong and worthy of :man_facepalming:


(Edward) #212

“It’s not pink, it’s lightish red!”


(Excited about Christmas) #213

Is it legal to put advice in a prospectus?


#214

This wasn’t in the prospectus - it was in the blog post blurb - it was phrased something along the lines of - to paraphrase : Don’t worry about missing out - you can use your overdraft to buy shares


#215

I can see why the possible PR issues of “promoting” the use of the overdraft to acquire shares have come to the forefront - however what if someone was due to get paid at the end of the week and is say #FullMonzo - they’d be unable to invest into a company they are really aligned with simply because they get paid in a weeks time. The overdraft facility is part of the service Monzo provides so to ban or block access to it for the purposes of buying into Monzo seems to be contradictory?

I think the prospectus was clear at page 11 and 28 -
“Applicants must have enough money in their Monzo account at the time of Application to pay for any E Ordinary Shares that they seek to buy. Applicants are able to use their
overdraft for this payment – any such overdraft will be subject to the usual overdraft charges”

Surely the overdraft is part of the money available in their Monzo account and therefore should be able to use it? But I can see how the offering to use a specific Monzo overdraft to purchase the Monzo shares could be criticised.


#216

Exactly. It’s a fair criticism as well. They would have been better to have not mentioned it at all, as to mention it feels like promotion.


#217

I’m unsure on this, I feel like for something like this, all bases need to be covered, and therefore the statement that the overdraft is available (and would not be banned or blocked for the period of the crowdfund) needs to be publicised and I feel that Monzo did this in the best way possible - the overdraft itself is “opt-in” and it was undoubtedly going to attract some criticism but I’m sure that Monzo was prepared for that - the forum itseld and further comments following the article show that this was thought about. But again I can see exactly why it was picked up on.