Wowwo Q&A
This is a thread where you can ask your questions and write your Feedback about the Wowwo situation.
Dear Investors,
On December 17, 2021, we informed you that we made the decision to suspend loans originated by Wowwo from the Primary and Secondary Markets on Mintos until further notice.
The suspension is a cautionary measure to protect investor’s interests that is driven by macroeconomic changes which impact Turkish Lira exchange rate towards Euro. Given that Wowwo issues loans in Turkish Lira, but places them on Mintos in Euro, the company needs to pay the exchange rate difference from its own resources when forwarding borrower payments if Turkish Lira value drops.
As the Turkish Lira continued to depreciate rapidly, which could create a challenging environment for the company to meet its obligations towards investors on Mintos in a timely manner. We suspended Wowwo from the Primary and Secondary Markets.
Since then we shared also an update with you:
January 28, 2022
Dear Investors,
On Thursday, 27 January 2022, we had a meeting with Wowwo to further discuss possible solutions to the case of Wowwo's borrowers' repayments not being transferred to investors on Mintos. In the meantime, the funds due by Wowwo to Mintos and investors are moved to funds in recovery. The API communication system between Wowwo and Mintos was disconnected by the Turkish lending company due to currency risk that materialized for Wowwo as Lira continued to lose value against Euro.
In the most recent meeting, we exchanged information and proposals with the management of Wowwo, and we are planning to have a follow-up meeting next week when we will further discuss proposed options which will in the meantime be evaluated by both parties.
Mintos negotiations team is fully focused on coming to a resolution that will disrupt investors the least, as the case is currently classified “Stage 3”. You can find more about what this means in the article here:
https://www.mintos.com/blog/how-we-deal-with-loan-originator-issues-and-recovery-of-investor-funds/
As soon as we reach conclusions of value for investors and that can be publicly shared without disrupting our negotiation position, we won’t hesitate to update you immediately. In any case, we will share a more detailed follow-up after the upcoming meeting with Wowwo.
Please share your questions, thoughts and Feedback about Wowwo here.
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Hello,
As long as Wowwo is doing business as usual, I am expecting full recovery.
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Hello Minto's, why are you engaging with a non-resident entity using a local court? Whats the reach of the local court to enact any sentence in Turkey? Are you joking with us? You should got after them in their home country! You are seriously looking very incompetent and like amateurs. I will vote against the approval of Minto's annual accounts as the same are flawed and do not reflect Minto's responsibilities arising from Wowwo's mess (as well other situations coming from selling loans advertised as being in Euros which were not).
Change your strategy asap guys!
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I'm seeing a lot of concerns regarding the reach and effectiveness of Mintos' course of action. I want to trust that Mintos has looked at all options and chose the one that is the most likely to yield the best possible result. Arbitration is a voluntary process, usually engaged because there is an arbitration clause in the contract. This means that Wowwo agreed to arbitration either by signing a contract with an arbitration clause in it, or explicitly during their negotiations with Mintos. The outcome of an arbitration can also be enforced through another court, so if Wowwo refuses to pay, Mintos can still escalate the case.
Let's wait for the outcome and hope for the best, only time will tell if Mintos chose the right way to go forward.
Regarding possibly opening a case against Mintos, what is the benefit there for us as investors? What do we stand to gain here? We as investors benefit from Mintos being a profitable and functional platform, and I don't think a court case is going to make that happen.1 -
Bei meiner automatischen Strategie habe ich investieren in Euro angegeben.
Warum wurde dann in wowoo mit Türkischer Lira investiert?
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Thats the smoking gun! I have also selected euros loans!
Das ist die rauchende Waffe! Ich habe auch Eurokredite ausgewählt!
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This is going to be the proof of fire for Mintos. If they are not able to recover money from a company which is not going bankrupt, I do not see what will prevent other lenders to do the same. A large chunk of the loans available come from lenders based in countries with ineffective court systems. Without there countries there are not going to be that many loans available in the market.
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Dear investors,
We reached out to our Legal team to provide you with the response to a question many of you were inquiring about - why did we choose to proceed with the legal case against the Turkish lending company Wowwo with the Court of Arbitration of the Association of Latvian Commercial Banks.
Here’s the reasoning.
The material law that applies to the Mintos contracts with lending companies and in the assignment agreements is the law of the Republic of Latvia (Latvian law). Latvia is also a country where Mintos products are currently built, and from where the services are provided to our customers. Since its inception, Mintos has applied Latvian law to contracts concluded with lending companies, and although there were some exceptions in these contracts - in general, Latvian law is our baseline.
In terms of jurisdiction clauses in cooperation contracts with lending companies, when filing a claim, the Claimant (Mintos or a lending company), is enabled to choose to do this:
- with a regular court in Latvia,
- with a particular arbitration court mentioned in the agreement,
- with the court of the country where the respondent is based.
When it comes to recoveries, we assure you that we don’t decide on the court selection lightly. Having such a jurisdiction clause gives us an option to choose our approach based on the evaluated pros and cons regarding a specific case within the context of each of the three options. We also engage competent local legal counsel specialized in dispute resolutions to give us insights, and based on the knowledge assessed, we arrive at the decision that is in the best interests of the investors.
In the case of Wowwo, our analysis lead us to a decision to opt for the arbitration court in Latvia. There are certain advantages to arbitration, e.g. the speed for resolution of disputes being the ultimate advantage. Given that in the Wowwo case, both Latvia and Turkey are parties to the New York Convention (https://www.newyorkconvention.org), when having obtained the arbitration award, Mintos would proceed with recognition and enforcement of the arbitral award in Turkey.
One of the key downsides of taking the claim to the Turkish courts is the length of the process, given that the Latvian law is the material law applicable to the dispute.
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Dear CHRISTOPH GEHRKEN, Luis Filipe Da Rocha Alves,
We’d like to remind you that each assignment agreement that comes with the investment in a loan part and is the governing document for the investment, describes the currency in which the loan was issued. Furthermore, information on Wowwo's page on Mintos includes documents such as loan agreements, financials and others where the currency in which the loans are issued is stated. We explain this further in our Help Center. Nevertheless, after investors’ feedback, we made this information more visible across the platform for your convenience, for example, the loan details page.
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Hello Annija (Mintos),
Thank you for the clarification.
You made the following statement:
"Given that in the Wowwo case, both Latvia and Turkey are parties to the New York Convention (https://www.newyorkconvention.org), when having obtained the arbitration award, Mintos would proceed with recognition and enforcement of the arbitral award in Turkey."
Do you mean that the decree of Latvian arbitration court will be able to enforced in Turkish legal system (ie. is this arbitration resolution probated in Turkey)?
Secondly, the demand has to be 100 % recovery of the principal. Pretty much the only things that can be negotiated are the maturity of the new payment plan. I guess the default interest rate will come from Latvian law?
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If they do not appear, it is too bad for them.
The important thing is how valid is this verdict in Turkey - can this decree be forced in Turkey.
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Hello Annija your claim is not
accurate. When i make a filter in Mintos platform to include only loans in euros i’m expecting to invest in euros and get paid in euros. Mintos’s just needs to admit the error. This error is still persisting by including new lenders in Mexico and other countries as euro loans. Sorry but youre wrong. I want also to reinforce that as a shareholder I’ll vote against the approval of Mintos annual accounts.0 -
Dear Jarmo Ville Viikki, Gerardo Celso Guerreiro Mestre,
Thank you for understanding that we can share only factual information from the field, once the legal process is rolled out. As we reported, we’re working on setting up the case. As soon as we have more information, we will be happy to share them with investors. We hope you understand that it is also in the interest of Mintos to have this case already at the beginning positioned in a way that will bring the best outcomes for investors, hence for Mintos, too.
When it comes to your questions: the decision of the arbitration court will be taken according to the procedural rules of the Turkish courts for recognition and enforcement in Turkey. Second, If we understand correctly, then your question is whether the Latvian law will apply to the default interest rate that will be claimed from Wowwo. The answer is yes, it will be the contract concluded with Wowwo by Mintos and the Latvian law that will apply.
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Dear Luis Filipe Da Rocha Alves,
Thank you for your comment and your feedback!
Please note this is not an error. When opening each loan separately, on the page it is possible to see the currency in which the loan was issued. Lending Companies borrow the funds in EUR therefore it is currently displayed as EUR loan on the primary market. And we would like to remind you that the governing agreement for the investments is the assignment agreement that explicitly elaborates in what currency the loan was issued to the borrower.
We will look into options to make it more transparent. Thank you for the feedback!
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Hello Annija (Mintos),
Have the arbitration scheduled? What is the expected timeframe when the money starts flooding to the Wowwo investors?
Will the repayments shared equally based on the stake of the whole Wowwo debt (that would be the fairest way to distribute the payments)? You know, to consolidate it into one large debt and then Wowwo makes timely repayments and it is distributed to the investors accordingly.
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Hello,
Why won't Mintos follow the procedure that Peerberry is following? Repaying from all the profitable organizations/LO until the situation stabilizes?
That would be a strategy that all investores would agree with a repayment plan for 3, 6, 9 months or 12/24 months.
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That would also gain confidence and TRUST from the investors towards Mintos.
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Why there is no update, once again??
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Dear MIGUEL ANTONIO ABREU, on Friday we will share our regular Recoveries update.
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Ive Just Read the Funds in recovery update and im not happy about it, given the fact I have a significant amount of money invested in wowwo! I just have a feeling this is going to take a very long time and the outcome might be very dissapointing
These wowwo loans are unlikely to ever be recovered, even with Mintos' strategy of suing WOW in a Latvian court. As Mintos itself has acknowledged, Turkey has an extremely low rating in the World Justice Project’s Rule of Law Index list, being 117th out of 128 evaluated countries.
Loss of investments is an extremely serious situation, because you only need that to happen to 10% of your portfolio and your expected rate of return on the whole portfolio drops to ZERO. Why 10% of a 'conservative' strategy is invested in one loan originator?
TWO QUESTIONS: why did Mintos wait until the Turkish Lira completely collapsed before putting Wowwo into suspension? The Turkish Lira crisis was building up for many, many months, even years before and was predictable (if Mintos didn't see it, they need to hire some more FX specialists). Given this, why didn't Mintos require that Wowwo hedged its foreign exchange risks, as they encourage other Lending Operators to do? I've read Mintos response to this in other posts and it just isn't convincing. It could be argued that I shouldn't have put any money into Wowwo, given the above, but I don't have time to track every segment of my portfolio with Mintos (and the many other P2Ps). If Mintos gives a risk 7+ rating to an Operating Lender, that should mean that Mintos has done its homework on an Operating Lender. If there potential problems with that OL (eg large foreign exchange risks as in this case), then it should either (i) require the company to address the risk, (ii) give the company a lower risk rating, (iii) suspend the company when the risk becomes significant (Mintos eventually did that, but far to late in the game).
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The only reasonable thing for us to do is sue Mintos. They are clearly not acting in good faith in favor of its investors.
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I feel it is too early to sue Mintos (but if necessary this step should be taken).
I suggest to give them time to run the recovery and litigation with Wowwo. The fact that this Latvian court is valid also in Turkey via some sort of agreement or something like that, is a valid argument for them to do the litigation in Latvia. The important thing here is the probanity of the verdict in this court in Turkey and in the eyes of Turkish liquadator agencies (if such are needed).
However, less than 100 % recovery while the company stays in business is not acceptable. I am not interested in bankcrupting Wowwo, but I am simply interested in getting my invested money back. If there will be losses, then it should be caused by clear bankcruptcy (the risk we are taking - the insolvency of a LO).
Scamming the investors is not cool though.
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What a bunch of trash "support". I'm among the lucky ones with only a relatively small percentage exposed to Wowwo, but since February '22 I have already withdrawn about 40% of my investments on Mintos (and would be more if pending payments didn't explode because of a lot of investors thinking the same) because of the absolute incompetence Mintos has shown in this case and many others. Basically the Mintos response to Wowwo debacle: investors are stupid and fully responsible. Mintos response to Russia debacle: We might give part of your money back if we can take a cut of 20-30%. What a huge difference compared to competitors. Shame.
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Mintos is just a beautifully designed website. There is no business behind it. People should run away from this platform if they don't want to lose all their money.
It is a shame that it is the fault of the investors "for not knowing how to find the legal gaps in the small print" and that they still do not assume any mistakes. They have not even apologised for their disastrous management.
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I'm filling a complaint on ALL entities I've identify/is related to the Latvian state. Maybe someone will provide me/us with straight answers.
I will also try to share this thread on social media.
I invite everyone to do the same.
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I am not doing any complaints yet.
However, if I see reason to file a lawsuit, I will sue Mintos. But it is too early to say anything as it is unlikely the money is lost. AFAIK, the business of Wowwo (according to Mintos even) is doing very well (they visited in Turkey in December 2021 to see it themselves).
This non communication is just preparing for the law suit from Wowwo side. In court they likely answer. Mintos has to be strict with the claim there though. And according to Mintos, the court in Latvia is accepted in Turkey as well by Turkish officials.
If they do not give any answers to the Latvian court, the things will proceed faster and the case is easier. But this scenario is unlikely - however I guess anything is possible.
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As i stated above, the amount in question for me is too small to think about legal steps too. All i can say is that the trust in Mintos is completely gone. Even if they offer 50% interest rates with 100% cashback, I will not invest another cent. I can't even trust that the forced 10% withholding tax on notes is actually going to taxes, that's how far they have sunk in my eyes. I am active with 6 p2p companies, only from Mintos I am actively withdrawing money and actually worried about it. Just made a support account today so I could speak my mind and maybe even deter newer investors.
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With me it is less than 5keuros.
In my networth it is not that big deal but I am not going to approve the actions of Mintos if they are not able to either recover 100% of Wowwo (best case scenario) or otherwise bankcrupt Wowwo (worse scenario).
Basically, if they do not do what is reasonably expected from Mintos to do and let them steal our money.
But as I said, it is too early to say when even the legal proceedings are in so infancy steps. Too early to do anything/judge Mintos.
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I do not want to pay my bills either.
However, if my choice is either to pay or lose my home - I will rather pay my bills.
If Wowwo has something to lose in avoiding the repayments, and the loss is big enough for them, they will pay. Believe me.
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I agree, Jarmo. Fact is, for me, a 100% write off on Wowwo would not even touch me. I did 99% of my investments here manually or at least custom strategies that did not include Wowwo. But why would I trust/allow Mintos to even handle 0.001% of my net worth?
My points are rather:
1. Support and information sharing has been abyssmal.
2. They keep adding new lending companies, while I very much question their due dilligence.
3. When you add newer companies, why do they immediately get access to almost unrestricted funding? How much did Wowwo steal? How long were they active on the platform?
4. Interests on pending payments are simply not paid. And not that long ago companies got a longer delay as well. I understand that they work with external companies, but it is very clear they just take advantage of the situation and don't control their cash flow either.
5. The Russian situation: they just inquired whether investors would be fine with taking a 20% cut. Where would that 20% go? On Twino, for example, interests on Russian loans have been paid non-stop since February. And yesterday they shared the plans to repay the principal, without losses to investors.
6. In addition to that, so far no solution for RUB/KZT accounts and exchange. And I understand there are sanctions.
7. With the introduction of notes they simply cut off the secondary market for claims.
8. Withholding tax? No, thank you. Profits on Mintos are getting more and more questionable each day, I don't want anybody touching my bookkeeping.
9. In the case of Wowwo (and defaults); there is NO accountability or partial responsibility taken. Showing some good intentions or even taking a small stake in the questioned amount would already go a long way.So with all of those points (and many more that I didn't want to include in this already long rant), I do not have a single reason to pick Mintos over any other platform.
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Another strategy we should follow, in addition to taking legal action against Mintos, is to start telling everyone, on all possible platforms, what is going on at Mintos (always the most effective)
I am convinced that the company does not care about our former customers, they know that we will never trust them again because they are incapable of taking a single step in the right direction. However, it is different if they start to notice it in the volume of new "victims" they will be attracting.
Then comparisons with competing companies are a scandal. It is a constant attack on all investors like us.0
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