London Capital and Finance

Supercalafragalistic

Yes I had wondered about the auditors too.
Re captain careless’s company, it would be interesting to see if any of their phone calls have been recorded by anyone. It wonder if any ex employees would be prepared to disclose their training methods and practices within the company.

It seems paradoxical that this chap is affiliated with Heropreneurs.

Supercalafragalistic

https://heropreneurs.co.uk/judges/

masonic

Supercalafragalistic wrote: »

Thats great logic. So if you are lied to, its your own fault.. If someone tricks you its your fault. If someone robs you its your fault. If someome murders you its your fault.
Thanks for the imsight.

People who elect to manage their own affairs have to take a certain amount of personal responsibility for the choices they make. But there are clear failings in regulation as well. Nobody involved in this mess is blameless.

Is it fair to expect any reasonable person who comes across a new company in a "price comparison site" to at least visit their website before handing over thousands of pounds? I think so. Should they have at least a cursory leaf through the investment brochure before investing? Definitely. Should they read the Investor Classification text before ticking the box to confirm which investor class they fall into, including the bit that states they "may expose me to a significant risk of losing all my money"? Without doubt. If bondholders did any of these things, is it reasonable to expect them to understand that they weren't investing in a savings account. Yes.

On the other hand, do they have the right to expect that the FCA should act promptly to investigate companies who are misleading consumers in their advertising? I'd think so. Should the brochure have outlined that approx. 25% of the money they invested would be taken as commission and would never reach the borrowers? I think so.

Reaper

Surge used misleading adverts aimed at investors which were signed off by LCF as a regulated firm.

Since those adverts were a clear breach does that in any way open access to FSCS on the basis of breaking FCA regulations?

I very much doubt it sadly, but just asking in case there is some little known part of the rules I am unaware of.

masonic

jimjames wrote: »

I wonder if Ernst & Young might be of interest too as they signed off the accounts for LCF last time when the same issues should have been visible. Even for an auditor 12 companies wouldn't be much to check

As far as the accounts go, they were probably all in order. Companies House records suggest that there was no attempt to hide what was going on and the auditors would not know the details of how this money was raised. As I mentioned in an earlier post, charging an up-front fee to borrowers and rolling up fees into loans is not an unusual practice, although the fee in this case was very high, it probably wouldn't be an auditor's responsibility to judge whether or not this was improper.

AnotherJoe

masonic wrote: »

We've discussed the misleading ads to death in this thread and I've seen many examples which are clearly aimed to mislead by omission of risk statements and inappropriate comparisons with cash savings. What I've not seen is one claiming the money was protected by the FSCS. Do you have an example?

Trying to be clever? I think its clear when the ad says "protected by FSCS" the general public think that means their money and not some obscure bit of business that LC&F also do. Its like an ad for (say) a Ford Fiesta that says "10 year guarantee" when 6 layers down the guarantee is actually for the deposit you lodge with the dealer for a week before you buy the car.

Those misleading ads were, after all, why FSCS eventually forced them to stop making those claims. The "Capital at Risk" wording came in much later near the end.

masonic

Reaper wrote: »

Since those adverts were a clear breach does that in any way open access to FSCS on the basis of breaking FCA regulations?

I very much doubt it sadly, but just asking in case there is some little known part of the rules I am unaware of.

It opens up the regulated firm to regulatory action - that action was taken. It could open up the directors to legal action.

FSCS is there to protect consumers who engage in qualifying financial services and products, such as receiving regulated financial advice, saving into deposit accounts and taking up mainstream investment services. The firm must be a member of the scheme, and the product or service must qualify for protection. Neither is the case for LCF.

jimjames

AnotherJoe wrote: »

Trying to be clever? I think its clear when the ad says "protected by FSCS" the general public think that means their money and not some obscure bit of business that LC&F also do. Its like an ad for (say) a Ford Fiesta that says "10 year guarantee" when 6 layers down the guarantee is actually for the deposit you lodge with the dealer for a week before you buy the car.

Those misleading ads were, after all, why FSCS eventually forced them to stop making those claims. The "Capital at Risk" wording came in much later near the end.

You seem to be confusing 2 organisations. FSCS have no regulatory power and did not force LCF to stop doing anything. The FCA did however. It's very important to be clear when making such claims.

As per Masonic, no adverts I've seen said the words "protected by FSCS", in fact it was the opposite albeit in the small print and in the Information memorandum.

So the question is, have you seen an advert that DOES say FSCS protected? The one on this page says FCA regulated but no mention of FSCS

jimjames

Obviously according to forum rules I can't mention names but it appears that one person heavily involved with LCF with initial SHK has made a donation to an MP who is a member of the government and got into trouble with her colours this week.

https://damn-lies-and-statistics.blogspot.com/2019/03/simon-hume-kendall-donation-rudd.html

masonic

AnotherJoe wrote: »

Trying to be clever? I think its clear when the ad says "protected by FSCS" the general public think that means their money and not some obscure bit of business that LC&F also do. Its like an ad for (say) a Ford Fiesta that says "10 year guarantee" when 6 layers down the guarantee is actually for the deposit you lodge with the dealer for a week before you buy the car.

I'm not trying to be clever. I genuinely haven't seen an example of an ad saying "protected by FSCS". Can you provide an example?

Those misleading ads were, after all, why FSCS eventually forced them to stop making those claims.

The FSCS did nothing of the sort. You seem to be confusing the FSCS with the FCA, as another poster has previously remarked.

FSCS = Financial Services Compensation Scheme - the independent industry funded scheme who offer compensation for qualifying products and services when one of their members becomes insolvent and cannot meet its obligations.

FCA = Financial Conduct Authority - the regulator of the financial services who authorised LCF's lending business and took enforcement action against them 2 years after being warned about the misleading advertising.

I realise that you know this and are probably pretending that you don't to make a point, but if that point is that consumers shouldn't be expected to know that investments with FCA authorised firms might not be protected from loss by the FSCS, then that would be a very dangerous state of affairs.

The "Capital at Risk" wording came in much later near the end.

Please feel free to review earlier posts in the thread to see the risk warnings on the website, brochures and investment memorandums going back several years. I accept that the ads were misleading and never suggested otherwise, but to the best of my knowledge no claims about FSCS protection applying were made.