London Capital and Finance

GDB2222

masonic wrote: »

Better late than never I suppose, although Moneybox picked up the story a lot more quickly and will be giving more coverage to it today.

Hopefully some of this coverage will be seen by those targeted by Blackmore and other purveyors of wolves dressed in sheep's clothing.

I was asked to value losses on SSIPs. The owners had been persuaded to cash in perfectly good standard pensions and invest in forestry in S America. Unregulated, of course.

Fabulous returns were forecast, but obviously unobtainable. The crux of the matter was that these investors were buying newly planted saplings in the heart of the forest for £250 each. A moment's thought should have told them that was a silly price. If they had been paying a reasonable price for the saplings, maybe £1-2, this might have been a decent investment, though very high risk of course.

The purveyors of the scheme made millions.

dunstonh

The FSCS have confirmed that they will not accept claims over LC&F. Whilst the investors won't be happy, it is the correct decision and it means that retail consumers who use regulated options won't be picking up the bill.

jimjames

masonic wrote: »

Better late than never I suppose, although Moneybox picked up the story a lot more quickly and will be giving more coverage to it today.

Hopefully some of this coverage will be seen by those targeted by Blackmore and other purveyors of wolves dressed in sheep's clothing.

I understand it will also be in the Sunday Times this weekend as well as on BBC South West on Monday. There will be a section on Moneybox any minute now

Voyager2002

Moneybox (Radio 4) is examining the comparison sites that led investors into this pit. On now.

AnotherJoe

dunstonh wrote: »

The FSCS have confirmed that they will not accept claims over LC&F. Whilst the investors won't be happy, it is the correct decision and it means that retail consumers who use regulated options won't be picking up the bill.

The elephant in the room is that people complained years back to both FSCS and advertising standards about their ads and were fobbed off or bounced between the two. SO I think its disingenuous of FSCS to say "not our problem" when they could have put a stop to the ads years back, before they took so much money under false pretenses.

dunstonh

jimjames wrote: »

I understand it will also be in the Sunday Times this weekend as well as on BBC South West on Monday. There will be a section on Moneybox any minute now

Cue the sob stories of <insert public sector worker> who placed tens of thousands blaming everyone else but no coverage of how people can avoid these things by not letting greed overcome common sense.

I am really sorry they lost money. However, who on earth invests tens of thousands of pounds in a company they have never heard of where the top response on google is a thread on this site that warns people not to do it.

Naievity? stupidity? no common sense? Blinded by greed? no personal responsibility? Who knows. Many of those people would have put more research into their mobile phone purchase than they did into this extremely high-risk unregulated investment.

Maybe its too early to be saying things like this but I am flabbergasted at the number of people that got taken in.

A number of DIY investors on this site go on about the nanny state style restrictions that exist in some areas of financial services. However, this perhaps shows why they are needed.

eskbanker

AnotherJoe wrote: »

dunstonh wrote: »

The FSCS have confirmed that they will not accept claims over LC&F. Whilst the investors won't be happy, it is the correct decision and it means that retail consumers who use regulated options won't be picking up the bill.

The elephant in the room is that people complained years back to both FSCS and advertising standards about their ads and were fobbed off or bounced between the two. SO I think its disingenuous of FSCS to say "not our problem" when they could have put a stop to the ads years back, before they took so much money under false pretenses.

Surely you're conflating FSCS with FCA there? The FCA undoubtedly has questions to answer about its regulatory role in all this and was the right body to approach regarding LC&F's advertising and broader conduct, but that's a separate issue from any liability that FSCS has to satisfy claims.

jimjames

dunstonh wrote: »

Maybe its too early to be saying things like this but I am flabbergasted at the number of people that got taken in.

A number of DIY investors on this site go on about the nanny state style restrictions that invest in some areas of financial services. However, this perhaps shows why they are needed.

I am too but I certainly think more regulation of such products is required. There are dozens currently operating with a very similar model and very few show suitable risk warnings.

There are some bondholders doing some digging into the situation but it's a shame they didn't do that beforehand as at least some of the warning signs were out there.

One thing in particular that has struck me is that most people don't/didn't understand the difference between an ISA and a bond. So LCF were able to put a warning about bonds on their website but people wouldn't have linked that to the ISA product.
I think there is also some very clever marketing of these mini bonds using specific words that imply security such as

London Capital & Finance
Basset & Gold
Castle Trust Fortress
Astute Capital

jimjames

Interesting that Moneybox say there is an investor who has a letter from FSCS from a couple of years ago that says they would be covered. I wonder if there is more to it or they were advised to invest hence the cover

masonic

AnotherJoe wrote: »

The elephant in the room is that people complained years back to both FSCS and advertising standards about their ads and were fobbed off or bounced between the two. SO I think its disingenuous of FSCS to say "not our problem" when they could have put a stop to the ads years back, before they took so much money under false pretenses.

The FSCS is not an autonomous organisation with the freedom to decide whose losses it covers. It is a statutory body, constrained by the Financial Services and Markets Act. The FSMA clearly defines who is eligible for cover under the scheme and investors in LCF do not meet the criteria.

I agree it is pretty disappointing that neither the FCA nor the FSCS have been able to categorically state that there was no cover, yet it couldn't be clearer from the legislation that there was none.

That said, I don't think anyone has been able to provide any evidence that the sales materials claimed FSCS protection applied, and the financial promotions sent to bondholders, and the website, was clear that it did not apply.