Buy2letcars

mazzetti

Oh I thought it was the magnet on the front of a gondola.

Delburn

The inevitable collapse of buy2letcars and wheels4sure has started
https://www.fca.org.uk/news/restrictions-placed-raedex-consortium-limited

ivormonee

I haven't looked at this in any detail, if at all, at any stage as the mere thought of buying a wasting/ depreciating asset that yields a sure-fire capital loss over time just didn't seem appealing. I know the business model may not be as simple as that but I simply make a back-of-an-envelope mental comparison of buy-to-let properties and buy-to-let cars, the former with an inherent potential for capital gain to accompany ongoing yield and the latter quite the opposite.

jimjames

Delburn said:

The inevitable collapse of buy2letcars and wheels4sure has started
https://www.fca.org.uk/news/restrictions-placed-raedex-consortium-limited

FCA website is still very confusing and unfit for purpose. The page linked from there still seems to suggest that this is covered by FSCS (it's not) but unless you are completely au-fait with investment terminology you could easily think otherwise from the FCA site.

https://register.fca.org.uk/s/firm?id=001b000000j3tCyAAI#what-can-this-firm-do-restrictions

eskbanker

justworriedabit said:

As you know the choice is yours but I strongly recommend you do a lot more research and risk assessment if you was to lose all as that can happen with any investment. Hope it works out for you

Are you replying to the old posts from last year?  Have you read today's ones?

justworriedabit said:

Read the very helpful line  FCA but NOT belong to the compo scheme.
https://www.mirror.co.uk/news/uk-news/sales-pitch-promised-astonishing-returns-23519219

I'd humbly suggest that anyone researching investments refers to more definitive and reliable sources than a tabloid newspaper (especially one with past form for fake news), such as those in earlier posts....

Delburn

Unsurprisingly, the FCA state that the directors of Raedex Consortium, But 2 Let Cars Ltd and another associated company have placed each of these companies into administration:
https://www.fca.org.uk/news/news-stories/raedex-consortium-limited-and-buy-2-let-cars-ltd-enter-administration

Croeso69

allunnicks said:

I am looking at investing in this scheme. Looking to find out how safe/good the scheme is. Any feedback appreciated, I think it was on this forum back at the beginning in 2018 so looking for latest information.  

Probably a car crash waiting to happen!

jimjames

I wonder if the investors will find out which cars they own, if any

Rich2808

jimjames said:

I wonder if the investors will find out which cars they own, if any

Must be a worry for those affected.
One guy claims to have invested his entire savings with them? Another has invested £60,000.
Last post pre today was 'great company - have invested with them for 7 years and the company has been efficient and true to its word'
https://uk.trustpilot.com/review/buy2letcars.com

underground99

jimjames said:

Delburn said:

The inevitable collapse of buy2letcars and wheels4sure has started
https://www.fca.org.uk/news/restrictions-placed-raedex-consortium-limited

FCA website is still very confusing and unfit for purpose. The page linked from there still seems to suggest that this is covered by FSCS (it's not) but unless you are completely au-fait with investment terminology you could easily think otherwise from the FCA site.

https://register.fca.org.uk/s/firm?id=001b000000j3tCyAAI#what-can-this-firm-do-restrictions

It's not that confusing.  On the above FCA 'news' page about the restrictions placed, the link by Delburn that you're quoting, there was an FAQ which was quite explicit that it wasn't covered by FSCS:

 - Q: Is my investment through Buy 2 Let Cars Ltd. covered by the Financial Services Compensation Scheme (FSCS)? Can I make complaints to the Financial Obudsman Service (FOS)?
-  A: The FSCS provides compensation for certain types of claims when FCA authorised firms fail and are declared in default. Buy 2 Let Cars Ltd. is not FCA authorised. Similarly, the FOS will not consider complaints. Should you wish to complain please raise this with Buy 2 Let Cars Ltd.

So, that should be as cast iron as it needs to be that Buy 2 Let Cars Ltd is not FCA authorised and FSCS will not give compensation and FOS will not consider complaints about any investments someone chose to make in Buy 2 Let Cars Ltd.  An investor in Buy 2 Let Cars Ltd doesn't need to go looking any further to find out if they can get compo; there isn't any.

On the  'page linked from there', the FCA page which you linked, the reason they were giving that link was to point people to the restrictions placed on Raedex.  It shows the supervisory notice restrictions (although by now, the page is now updated to show they are in administration).  
As standard, the FCA pages for each firm have a section about customer protections, e.g.:

Customer protections and the Register 
Regulated activities performed by regulated firms or individuals are covered by a range of protections. Most of these protections are not through the FCA but are primarily through the Financial Ombudsman Service and the Financial Services Compensation Scheme.
The protections available relate to specific regulated activities, products and investment types. We recommend that you check below for the activities that this firm has FCA and/or PRA permission to provide before going ahead. You should also contact the firm and ask them to confirm the specific protections available to you

From that information box, it's clear that whatever protections you have for your dealings with the regulated business Raedex, will be in relation to specific regulated activities that Raedex were allowed to carry out, which you can 'check below' lower down the FCA register page.  When you look at the permissions Raedex held, they are / were:

- Credit Broking (limited to broking for consumer hire of a vehicle)
- Debt adjusting (limited to relevant credit activities)
- Debt counselling (limited to relevant credit activities)
- Entering into regulated consumer hire agreements as owner (limited to consumer hire not secured on land)

And that's it.   So the FCA allowed Raedex to set up credit agreements for the cars they own, and obviously if the FCA doesn't think they're strong enough financially to keep doing that they will put restrictions on what the firm can do. Without permissions to arrange credit or enter into consumer hire agreements, Raedex's business model of buying and leasing out cars funded by borrowings from Buy 2 Let Cars Ltd, would be screwed.

If you leased a car from Raedex and have a complaint about Raedex's credit broking or the car hire agreements you signed when leasing a car from them, you could complain to the financial ombudsman. 

Did Raedex have any permission to provide providing investment services or financial advice? No. So even if when making an investment, you had transacted with Raedex (which investors in the scheme did not, they transacted with Buy 2 Let Cars) you would not be buying a regulated financial service.

So I don't agree that 'if you weren't completely au-fait with investment terminology' you would be misled by the FCA site into 'easily thinking' that if you made a loan to the private and unregulated Buy 2 Let Cars Ltd business, so that the unregulated Buy 2 Let Cars company could lend money to Raedex, so that Raedex could carry out a regulated business of hiring their own cars to consumers... you ought to get compensation from a compensation scheme for your private loan to an unregulated entity. And even if you had made the loan to Raedex, you can see that they weren't authorised to provide you with any regulated investment opportunities.  

Protections are limited to 'specific regulated activities' listed. And if you lent money to Buy 2 Let Cars you were not even engaging with a regulated company, let alone a specific regulated activity.

It's important that investors know what sort of things they should look out for when making investments which they hope will be covered by FSCS. They should at least learn how to navigate around the FCA register for the business with which they are transacting, and realise that if the entity is not authorised at all, or only authorised for services they're not buying, there is no hope of an FO complaint or FSCS compensation.

Delburn said:

In the lead up to these companies insolvency The Guardian has reported various quotes from the directors including:
"Although our company is well financed with a strong cashflow and bank balance, the FCA is putting 24 jobs at risk with this bizarre decision."
https://www.theguardian.com/business/2021/feb/21/city-watchdog-halts-new-business-at-buy2let-cars

When is The Insolvency Service going to take action against directors who make false and misleading statements in the lead up to company insolvencies?

Raedex felt it had good cash and cashflow and bank balance and was 'well financed' because it could keep taking loans from the other group companies. Perhaps they expected to keep it going as B2L Cars money kept flowing in from new investors.  So was it a 'false statement'?  We don't have the facts, but can assume the directors would want to paint their company in a good light for obvious commercial reasons.   Obviously, the whole 'invest in B2L cars' was a high risk venture that could easily go badly for investors as highlighted at the start of this thread and on the ones elsewhere on this board years earlier.

The FCA didn't think it had a strong balance sheet, presumably because it had to put the future liabilities to pay back massive loans and interest on one side of it, and only had some cash and a bunch of depreciating cars on the other (and couldn't include the fact that it would hope to get masses of future income from the people hiring the cars).   Without looking at the books, no comment, but we can probably assume FCA knows the accounting rules they expect businesses to follow. What's clear is that if the business model involves being FCA authorised to do something (like lease cars) and the FCA stops you doing that, you are screwed, and insolvency will probably follow with loss of jobs and loss of investor money. Perhaps they could have kept the wheels spinning longer if FCA left them unchecked, but in the long run for the sake of gullible investors it's probably a good thing they didn't.

If you want to report a director's conduct as being unfit, you can complain about it to Insolvency Service if the company is still running https://www.gov.uk/company-director-disqualification ; it's not clear how many they investigate or charge per year. Or once it's in liquidation you can complain about the unfit conduct to the liquidator / insolvency practitioner or receiver. If the company has already finished winding up you can ask for it to be restored to the companies register so you can take action against it (which is useless if it went bust without being able to pay off its liabilities).

Rich2808 said:

jimjames said:

I wonder if the investors will find out which cars they own, if any

Must be a worry for those affected.
One guy claims to have invested his entire savings with them? Another has invested £60,000.
Last post pre today was 'great company - have invested with them for 7 years and the company has been efficient and true to its word'
https://uk.trustpilot.com/review/buy2letcars.com

As was mentioned earlier on the thread, no real investment company with hundreds of reviews has that sort of ratio of good to bad ones without strictly controlling what reviews are allowed to appear on the review site, writing the reviews itself, and/or paying for them   Trustpilot is not really the place to go to figure out if your £60k life savings is going to be safe in an unregulated high risk venture.

Excellent 95%

Great 2%

Average <1%

Poor <1%

Bad 2%