LC&F -- Help! 😢

Silly_Shirl

My first post 😬 Ok, so I'm coming up to retirement age, with no private pension (irregular income), and invested my life savings in 3 year bonds/ISA with London Capital & Finance... £20,000 and they've now gone into liquidation, and I've been told I've lost the lot.
How can this happen, when the bond certificates say 'secured'? The company lied about everything, saying on the phone they had 250 companies loaned to, who were all asset assured. The webiste stated they were FCA authorised?
You'll perhaps note from my user name, I'm not the sharpest knife in the drawer, but don't understand how this can happen?
Also, will someone PLEASE be able to reassure me that ICICI bank doesn't carry any similar risk? What's left of my remaining and future savings, is going into their HiSave Bonus account. But they are an Indian bank, based in Mumbai. Is it safe? Help please.😕
Thank you.

Rheumatoid

Hi,
There is a large ongoing thread on LC&F here:

https://forums.moneysavingexpert.com/discussion/5346049/london-capital-and-finance

I'm very sorry you have been a victim.

Your savings up to 85k with ICICI are safe

R

Linton

LCF was not a bank and. Its bonds were loans to the company, not fixed rate deposit accounts. This type of higher risk investment is not covered by FSCS.


ICICI is a bank authorised to operate as such in the UK which provides fixed rate deposit accounts. It is covered by FSCS.

AnotherJoe

Silly_Shirl wrote: »

My first post �� Ok, so I'm coming up to retirement age, with no private pension (irregular income), and invested my life savings in 3 year bonds/ISA with London Capital & Finance... £20,000 and they've now gone into liquidation, and I've been told I've lost the lot.
How can this happen, when the bond certificates say 'secured'? The company lied about everything, saying on the phone they had 250 companies loaned to, who were all asset assured. The webiste stated they were FCA authorised?
You'll perhaps note from my user name, I'm not the sharpest knife in the drawer, but don't understand how this can happen?
Also, will someone PLEASE be able to reassure me that ICICI bank doesn't carry any similar risk? What's left of my remaining and future savings, is going into their HiSave Bonus account. But they are an Indian bank, based in Mumbai. Is it safe? Help please.��
Thank you.

The first part "how can this happen" is answered by the second part "the company lied about everything".

IMO you've been let down by a combination of carelessness / naivety on your part*, and the ineptitude of our financial and advertising regulators who let this company get away with their lies for far too long before pulling the plug. People in here made the advertising authorities know about their lies years ago.


* AFAICR from the main thread, there was a questionnaire you had to go through which pledged you were not putting more than 10% of your wealth into these bonds? Yet you put your life savings in?

Silly_Shirl

Hi ya'll, thank you for your kind replies, and the reassurance about ICICI. :beer:
I know now... hindsight and all that, but at the time a friend of mine had been invested with them for two years, and assured me they paid up on time, perfectly. He reinvested another 10k, just before I did mine.
I have dyscalculia, and I'm not an educated person, so please don't bash me on top of losing my life savings guys. Me and 14000 others, it would seem.
I'll have a good read through the other link mentioned. Thanks.

Silly_Shirl

…"there was a questionnaire you had to go through which pledged you were not putting more than 10% of your wealth into these bonds?"

I didn't get that questionnaire when I invested?
And if the regulators were made aware YEARS ago, why aren't they liable, for not stopping them?
Although, the bit I don't get, is they paid up my interest payments perfectly before the administrators moved in, so it's not as if they defaulted anyone, and as soon as they froze their assets, a financial company would be bound to go into liquidation!
By the time the administrators cream off their bit now... won't be much left to go around, and my friend's FA said there would be nothing left for us little people.

Shashy

Silly_Shirl wrote: »

By the time the administrators cream off their bit now... won't be much left to go around, and my friend's FA said there would be nothing left for us little people.

Did you invest in LC&F on the advise of a regulated IFA?

Malthusian

Silly_Shirl wrote: »

I didn't get that questionnaire when I invested?

Probably not. The questionnaire doesn't mean anything and has no legal significance.

And if the regulators were made aware YEARS ago, why aren't they liable, for not stopping them?

Because the regulators don't have any money. If you fine the regulator, that means you fine the general public, who pay via taxation. In general, when people lose their money in high-risk unregulated investments the general public does not bail them out. (There are limited exceptions, such as when they do so after taking advice from a regulated firm that goes bust.)

Although, the bit I don't get, is they paid up my interest payments perfectly before the administrators moved in, so it's not as if they defaulted anyone, and as soon as they froze their assets, a financial company would be bound to go into liquidation!

Not all. If they'd been running their business as they claimed, the FCA would have fined them for the misleading literature, LCF would have paid it, the FCA would have removed the freeze and LCF would have continued repaying interest and capital from their lending business. But as you say, LCF lied.

The people at fault are the people who have your money, not the FCA or administrators.

By the time the administrators cream off their bit now... won't be much left to go around, and my friend's FA said there would be nothing left for us little people.

Until the administrators release the statement of affairs, that is unknown.

badger09

@ Silly_Shirl

Not wishing to add to your worries, but you might want to think again about ICICI.

As others have said, your savings (up to £85k) would be perfectly safe there BUT there are several recent posts complaining about problems with their website, delays opening the accounts etc etc

Although they pay very slightly more than their closest rivals, you might think that is a small price to pay

Have a look at some of the others mentioned here

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

dunstonh

And if the regulators were made aware YEARS ago, why aren't they liable, for not stopping them?

Regulators are usually slow to react. I contacted the FCA years ago about them but they were not interested. Then when they do finally take an interest, they have to go looking for evidence.

Also, this is not a regulated financial product you put your money in. It was a high risk, unregulated loan note. A perfectly valid financial instrument. The regulator is looking at the regulated side of things most of the time. It can take a long time to get them to look at the unregulated side and they often have little remit in those areas.

Although, the bit I don't get, is they paid up my interest payments perfectly before the administrators moved in, so it's not as if they defaulted anyone, and as soon as they froze their assets, a financial company would be bound to go into liquidation!

Those so-called interest payments may not have been interest. They may have been new investors money funding them. There may have been no money in the pot for a long time.

The action the FCA took is significant. Only happens tends to happen with fraud.

Had the FCA left them continue, new investors would be losing their money daily.

and my friend's FA said there would be nothing left for us little people.

Shame your friend never asked his FA before investing. However, the FA is probably right. It all depends on where the money is and how much. As it stands, you are probably best to assume you have lost the lot and will not get anything back. Although if you are lucky, you may get a few pennies in the pound. Unfortunately, you now have a long wait to see.

jimjames

A good recent post on Bond Review about the situation with recovery of loans

https://bondreview.co.uk/2019/02/06/london-capital-finance-is-smith-williamsons-softly-softly-approach-in-the-interests-of-investors/