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  • FIRST POST
    • ikon66
    • By ikon66 13th Oct 17, 10:24 AM
    • 5Posts
    • 2Thanks
    ikon66
    Too good to be true?
    • #1
    • 13th Oct 17, 10:24 AM
    Too good to be true? 13th Oct 17 at 10:24 AM
    First post

    Came across this on a search

    cautacapital (can't post a link as a newb

    Offers up to 9% depending on amount invested for 10 years. Capital paid back after that period with no loss. Can withdraw after 3 years with no penalty as far as I can see??

    Unless I've misread something somwhere
Page 1
    • ColdIron
    • By ColdIron 13th Oct 17, 10:40 AM
    • 3,894 Posts
    • 4,747 Thanks
    ColdIron
    • #2
    • 13th Oct 17, 10:40 AM
    • #2
    • 13th Oct 17, 10:40 AM
    Search the forum for 'too good to be true', these things almost always are
    • alanq
    • By alanq 13th Oct 17, 10:46 AM
    • 3,935 Posts
    • 2,550 Thanks
    alanq
    • #3
    • 13th Oct 17, 10:46 AM
    • #3
    • 13th Oct 17, 10:46 AM
    It's offering a corporate bond. These do not have FSCS £85,000 protection. Higher interest rates imply higher risks. Whether or not you get all or any of your funds back will depend on the success of the investments the company makes.

    This investment is only available to "high net worth" or "sophisticated" investors which are defined on its web site.
    Last edited by alanq; 13-10-2017 at 10:56 AM.
    • eskbanker
    • By eskbanker 13th Oct 17, 10:48 AM
    • 6,285 Posts
    • 6,355 Thanks
    eskbanker
    • #4
    • 13th Oct 17, 10:48 AM
    • #4
    • 13th Oct 17, 10:48 AM
    I'd suggest reading beyond the headlines and down to the foot of pages like http://www.cautacapital.com/cauta-capital-bond-issue/, where you'll find
    This investment offering has not been approved by an !!!8216;authorised person!!!8217; under Section 21 of the Financial Services and Markets Act 2000.To view the content, you must be either: (a) High Net Worth Individual or (b) Self-Certified Sophisticated Investor. If you do not meet these criteria, you must not take any further action.This website assumes you have a clear understanding of investments of this type and is provided to prospective investors to evaluate the investment being offered. Before you will be able to view the offering you must certify your investor status. Investments of this type carry significant risks and the capital you have invested will be at risks. This investment is not covered by the FSCS.
    Came across this on a search
    Originally posted by ikon66
    P.S. Could you clarify what search brings this up in the results please?
    Last edited by eskbanker; 13-10-2017 at 10:53 AM. Reason: Added question re search
    • karlie88
    • By karlie88 13th Oct 17, 10:53 AM
    • 8,331 Posts
    • 106,068 Thanks
    karlie88
    • #5
    • 13th Oct 17, 10:53 AM
    • #5
    • 13th Oct 17, 10:53 AM
    As above.

    But also pay attention to their 'reviews':

    https://uk.trustpilot.com/review/www.cautacapital.com?

    8 highly positive reviews, all posted within 6 days. No reviews before and no reviews since. Says it all really...
    Official MSE canny forumite and HUKD VIP badge member
    • ChesterDog
    • By ChesterDog 13th Oct 17, 10:54 AM
    • 844 Posts
    • 1,557 Thanks
    ChesterDog
    • #6
    • 13th Oct 17, 10:54 AM
    • #6
    • 13th Oct 17, 10:54 AM
    The answer:

    Yes.
    I am one of the "Dogs of the Index".
    • Linton
    • By Linton 13th Oct 17, 11:03 AM
    • 9,032 Posts
    • 9,120 Thanks
    Linton
    • #7
    • 13th Oct 17, 11:03 AM
    • #7
    • 13th Oct 17, 11:03 AM
    I havent found anything questionable about the company. It seems to be a small company that does what it says - lending money for property developments. The interest rates seem reasonable for higher risk lending. Google comes up with nothing to suggest that it is trying to sell dubious products to naive investors - there isnt any any advertising at all.

    Whether its bonds are suitable for you is another question. Here is what Cauta's website says on its "Legal" page:

    This investment offering has not been approved by an !!!8216;authorised person!!!8217; under Section 21 of the Financial Services and Markets Act 2000.To view the content, you must be either: (a) High Net Worth Individual A high net worth individual is one who:
    • Had, during the financial year immediately preceding the date of the certificate, an annual income of £100,000 or more.
    • Held, throughout the same year, net assets of £250,000 or more excluding the residential home, a pension or the proceeds of life assurance contracts.

    or (b) Self-Certified Sophisticated Investor A sophisticated investor is someone who meets at least one of the following criteria:
    • Has been a member of a network or syndicate of business angels for at least the six months preceding the date of the certificate.
    • Has made at least one investment in an unlisted company in the two years preceding that date.
    • Has worked, in the two years preceding that date, in a professional capacity in the private equity sector, or in the provision of finance for small and medium enterprises.
    • Has been, in the two years preceding that date, a director of a company with an annual turnover of at least £1 million.

    . If you do not meet these criteria, you must not take any further action.This website assumes you have a clear understanding of investments of this type and is provided to prospective investors to evaluate the investment being offered. Before you will be able to view the offering you must certify your investor status.Investments of this type carry significant risks and the capital you have invested will be at risks. This investment is not covered by the FSCS.
    This seems pretty clear. Do you meet the criteria?
    • Gambler101
    • By Gambler101 13th Oct 17, 11:26 AM
    • 528 Posts
    • 1,293 Thanks
    Gambler101
    • #8
    • 13th Oct 17, 11:26 AM
    • #8
    • 13th Oct 17, 11:26 AM
    Its 9% for a reason, the reason is its highly risky.

    Only invest money you know longer like having, because that may well be the case.
    The instructions on the box said 'Requires Windows 7 or better'. So I installed LINUX
    • jimjames
    • By jimjames 13th Oct 17, 2:02 PM
    • 12,394 Posts
    • 10,984 Thanks
    jimjames
    • #9
    • 13th Oct 17, 2:02 PM
    • #9
    • 13th Oct 17, 2:02 PM
    I havent found anything questionable about the company.
    Originally posted by Linton
    The Trustpilot reviews would certainly look to be questionable
    Remember the saying: if it looks too good to be true it almost certainly is.
    • ikon66
    • By ikon66 13th Oct 17, 2:30 PM
    • 5 Posts
    • 2 Thanks
    ikon66
    As I said it did look too good, I got the info from their FAQ but didn't go into all of the small print. I'm sure it did say it was protected up to £85k

    But thanks all for the replies

    Cheers
    • Malthusian
    • By Malthusian 13th Oct 17, 3:35 PM
    • 3,703 Posts
    • 5,765 Thanks
    Malthusian
    Its 9% for a reason, the reason is its highly risky.
    Originally posted by Gambler101
    Royal Bank of Scotland bonds are 9% because they're risky. Bonds like these are always 8% or 9% because that's the point at which you attract the highest number of suckers.

    Less than 8% and it's not attractive enough to tempt them out of the regulated arena (you're barely offering more than certain loss-leader deposits). More than 10% and they start thinking "too good to be true" in large numbers (not just the one or two we see on MSE). 8-9% is the sweet spot.

    Unless it's a massive coincidence and storage pods, airport car parking and property bridging loans all happen to yield exactly 8 or 9% net of costs.

    If they were sold on a regulated stock market like RBS bonds, they wouldn't trade at a 9% yield.
    • Freddie Allen
    • By Freddie Allen 14th Oct 17, 10:36 AM
    • 18 Posts
    • 2 Thanks
    Freddie Allen
    That's an amazing deal. But it seems risky... Please inform me if anyone is going to try this out.
    • fwor
    • By fwor 14th Oct 17, 2:07 PM
    • 5,937 Posts
    • 3,995 Thanks
    fwor
    Building your post count Freddie?

    It's intended for UK investors, but you say you're based in Los Angeles.

    It doesn't help at all for people to tell you whether they are going to try it. Knowing that other people are going to take a risk does not help you at all in assessing what level of risk is involved. It would only help if they came back in say 10 years time and said what the outcome was.
    • Freddie Allen
    • By Freddie Allen 12th Dec 17, 12:31 PM
    • 18 Posts
    • 2 Thanks
    Freddie Allen
    Building your post count Freddie?

    It's intended for UK investors, but you say you're based in Los Angeles.

    It doesn't help at all for people to tell you whether they are going to try it. Knowing that other people are going to take a risk does not help you at all in assessing what level of risk is involved. It would only help if they came back in say 10 years time and said what the outcome was.
    Originally posted by fwor
    Yes.. Want to make my post count as you have. lol just kidding
    • dunstonh
    • By dunstonh 12th Dec 17, 12:45 PM
    • 91,108 Posts
    • 58,125 Thanks
    dunstonh
    Yes.. Want to make my post count as you have. lol just kidding
    Originally posted by Freddie Allen
    So, why not tell us what you think it is an amazing deal?

    100% loss potential. No FSCS protection. Extremely high risk. It isnt even a retail financial product. It is a financial instrument (i.e. not aimed at retail consumers).

    So, what bit of that appeals to you? Other than greed which is what most of these play on as greed dumbs the braincells.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Freddie Allen
    • By Freddie Allen 12th Dec 17, 1:59 PM
    • 18 Posts
    • 2 Thanks
    Freddie Allen
    So, why not tell us what you think it is an amazing deal?

    100% loss potential. No FSCS protection. Extremely high risk. It isnt even a retail financial product. It is a financial instrument (i.e. not aimed at retail consumers).

    So, what bit of that appeals to you? Other than greed which is what most of these play on as greed dumbs the braincells.
    Originally posted by dunstonh
    I'm not much into investing or financial deals. I'm learning and trying to gain knowledge about all these. 9% interest rate is what made it interesting for me. and also if we can withdraw it after 3 years.
    • planteria
    • By planteria 12th Dec 17, 2:08 PM
    • 4,964 Posts
    • 1,098 Thanks
    planteria
    i know nothing about CautaCapital, and i have no interest in buying their bonds, but..

    Royal Bank of Scotland bonds are 9%..
    Originally posted by Malthusian
    is interesting. are they at risk of becoming worthless, and investors losing all of their capital?
    • Malthusian
    • By Malthusian 12th Dec 17, 2:23 PM
    • 3,703 Posts
    • 5,765 Thanks
    Malthusian
    are they [RBS bonds] at risk of becoming worthless, and investors losing all of their capital?
    Originally posted by planteria
    Yes. If RBS goes bust you lose all your money. That's how corporate bonds work. Why the chin-scratching emoji?
    • dunstonh
    • By dunstonh 12th Dec 17, 2:49 PM
    • 91,108 Posts
    • 58,125 Thanks
    dunstonh
    is interesting. are they at risk of becoming worthless, and investors losing all of their capital?
    Yes. And with ringfencing of retail banking in place, the Govt will no longer have to step in and rescue a bank. It can let the rest of the bank fail with no direct impact on consumers.

    9% interest rate is what made it interesting for me. and also if we can withdraw it after 3 years.
    It is not like a fixed term deposit. It is like a loan. If they fail to repay then you would get back less and if they go insolvent, you could lose the lot. Many of these have failed over the years including a few high profile ones in recent years. Is 9% really worth it for something you can lose the lot in?
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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