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8% ISA with London Capital and Finance PLC

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  • bxboards
    bxboards Posts: 1,711 Forumite
    My issue is that you could 'invest' 1k, and get back 80 quid a year in 'interest' but you find when you want your 1k back it's not there. You could pay out 8% for ages just from the principle, with no actual investment at all.

    On the other hand, if they are using asset back property lending, 8% is do-able, I average around 8 to 9% from my own P2P lending over multiple sites - but I can pick and choose loans and do my own due diligence.

    I would not touch it with a bargepole, and I guess I'm a sophisticated investor who they are supposed to market to rather than folks on Facebook....
  • dealer_wins
    dealer_wins Posts: 7,334 Forumite
    jonesMUFCforever wrote: »
    This IMO is not investing but a bet.

    I posted similar but my post was removed. Not impressed with MSE!!!
  • Someone2088
    Someone2088 Posts: 9 Forumite
    Third Anniversary First Post
    Thanks for the answer verybigchris- you've addressed all of my concerns with well-reasoned & detailed arguments. That's really helped clear things up, and I think it's safe to say I won't be investing with them.
  • Malthusian
    Malthusian Posts: 11,055 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    Someone2088 wrote: »
    He said that LC & F as a company are regulated by the FCA, and are registered with Companies House (which I've just looked up- their company number is 08140312 if anyone else wants to look it up). According to Companies House, they have full accounts made up to 30/04/2017- which seems pretty legitimate.

    Not breaking the law and risking a prison sentence by failing to file annual accounts is an extremely low bar for "legitimate". They only have two more months to file April 2018 accounts before they become overdue - that's cutting it quite fine.
    Apparently, to date (28/08/2018) they have loaned out over £197m and currently hold a legal charge over £300m+ worth of assets (property/ land, etc)
    This assertion is worthless without a professional due diligence report by a firm of qualified accountants, paid by you as prospective lender (not by LC&F), who have checked that the assets exist, are worth what LC&F say they are, and that the security is enforcable.
    and have so far had £55.8m+ of loans repaid in full and on time.
    By saying this he was insulting your intelligence. It is a statement of the bleeding obvious. If they had failed to repay a single loan, they would be in administration, and would not be soliciting new investment.
    I haven't decided whether or not to go for this yet, as I'm very new to investment... and I'm aware that most of the comments on this forum are saying to stay well away from this, as it seems too good to be true
    If you've digested all the risk warnings and you still think it's too good to be true, walk away.
  • Malthusian
    Malthusian Posts: 11,055 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    This post is post #36 at time of writing.
  • InSearchOfHigherInterest
    InSearchOfHigherInterest Posts: 1 Newbie
    Hi, just want to say thanks to Someone2088 for their thorough research on this, and to all you other regulars for your really helpful answers. I have found myself here having Googled "London Capital and Finance Reviews", since I too have been dithering over "well is this 8% ISA worth a punt?" - but as someone has quite rightly pointed out, that is exactly what it would be! Lack of negative reviews on Feefo does not mean that it won't all come crashing down around everyone's ears within three years when I would be looking to get my initial investment back. Riskier than a risky thing, I will eliminate this from my enquiries!

    Thanks again, and happy investing, everyone.
  • johncroberts
    johncroberts Posts: 1 Newbie
    Interested in this company for savings. What I read on this thread from many is that the company is not protected by Financial Conduct Authority and not protected by the Financial Services Compensation Scheme, whilst their site does say so. Very confusing
  • ColdIron
    ColdIron Posts: 9,873 Forumite
    Part of the Furniture 1,000 Posts Hung up my suit! Name Dropper
    Strange that they should say this on their main page
    • Investments into the LC&F bond are not protected by the Financial Services Compensation Scheme (FSCS), and the bonds are not regulated by the FCA
    Elsewhere they state
    • Please note that the products are not regulated by the Financial Services Compensation Scheme. Refer to the section on Security to see how our protection works.
    Hard to see how the confusion arises

    This is not a cash deposit account, it is a high risk investment product. Of course this means that you risk 100% loss of your capital with no recourse to the Financial Ombudsman Service
  • OldMusicGuy
    OldMusicGuy Posts: 1,768 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    johncroberts wrote: »
    Interested in this company for savings. What I read on this thread from many is that the company is not protected by Financial Conduct Authority and not protected by the Financial Services Compensation Scheme, whilst their site does say so. Very confusing
    No it isn't, you seem to be ignoring what their website says. Under FAQ, number 5 is "Are the bonds / ISAs covered by the Financial Services Compensation Scheme (FSCS)?". And the answer, in plain English, is: "No, these bonds/ISAs are not protected under the FSCS as they do not meet the eligibility requirements." Even LC&F cannot make it any clearer than that.

    This is NOT a savings company, as this thread clearly explains. It is offering investments in which all your capital is at risk (as it clearly says on their website). Their investments are not covered by the FSCS scheme (as again their website says). They are perfectly legitimate investments but they are for experienced investors that understand the risks they are taking, which I suspect you do not.
  • Malthusian
    Malthusian Posts: 11,055 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    edited 7 December 2018 at 6:20PM
    OldMusicGuy wrote: »
    And the answer, in plain English, is: "No, these bonds/ISAs are not protected under the FSCS as they do not meet the eligibility requirements." Even LC&F cannot make it any clearer than that.

    But in fairness to [STRIKE]the OP[/STRIKE] (edit: John), there are introducers who go out of their way to imply that the bonds are FSCS-protected. Some of them are referred to in this thread.

    Or if not, that "asset-backed" means the same thing as FSCS-protected, which of course it does not. ("Asset-backed" means you can lose up to 100% of your money.)

    While LC&F couldn't make it clearer on their own website that the bonds are not FSCS protected, they could also refuse to accept business from unregulated producers who mislead savers, and not pay them commission for that business. They don't.
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