Pensioner may lose £20,000 after being 'duped' by investment firm

Annette Crewe, 69, invested her money with London Capital & Finance after being told that she would be investing in fixed rate ISAs, which are covered by the Financial Services Compensation Scheme (FSCS).

However, the firm invested in mini-bonds, which are unregulated, meaning that Miss Crewe’s investment was not covered.

“I haven’t got the cover that I thought I had,” she said. “At no point was I told that I had a mini-bond.

“The administrators said that they can’t guarantee that we will get our money back.

“I need to have this money. I’ve lost that £20,000.

“I’m 69 and before I’m 75 I have got to pay £30,000 to pay off my mortgage. I save as best I can, but I am now no longer safe.

“I now stand to lose my house. I can’t get a mortgage at my age.

“I really don’t know how I will get that money. I will have to sell my house.”

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Miss Crewe was provided with a letter and a certificate from London Capital & Finance saying that she had been signed up to a three-year ISA, promising eight per cent interest.

“There are 14,000 of us,” she said. “We have all been duped.

“There are people who have put their entire inheritance and their pensions in to this.

“Before I put my money in, I rang Companies House to research London Capital & Finance.

“I read all of the 200 comments about the company, and there were only about three negative comments.

“I rang the company. The first thing I said to them was that I was not willing to put my capital at risk.

“They said to me is I could get an ISA. He said if I put £20,000 in the government covered it.

“A payment was due on December 30. Nothing came through for a couple of days.

“I rang London Capital Finance and the phone rang once, and then it beeped. That’s when my stomach turned.

“I contacted the Financial Ombudsman. They told me that the Financial Conduct Authority (FCA) were investigating London Capital & Finance and they had to stop all their payments.”

Annette Crewe had invested £20,000 with London Capital & Finance. Picture: Josh Thomas.

The FCA ordered London Capital & Finance to not dispose of or deal with its assets and to cease conducting all regulated activity on December 13, 2018.

In a statement, they said: “When an authorised firm approves a promotion for mini-bonds, they must ensure that it is in line with FCA rules that the financial promotion is fair, clear and not misleading.

“This means, for example, that risks are appropriately communicated.

“On December 10, 2018 the FCA directed London Capital & Finance to immediately withdraw its promotional material on the basis that the way in which it was marketing its bonds was misleading, not fair and unclear.

“The FCA’s concerns included the fact that London Capital & Finance bonds were being marketed as ISA eligible when they were not.”

The FCA did not say whether people who invested with London Capital & Finance would be able to get their money back.

A statement said: “The company’s estate will be dealt with by the administrators, who will assess the company’s assets and put forward proposals as to how they will proceed with the administration.

“The joint administrators will write to you with their proposals for the administration within eight weeks of appointment, this will include the process of how you make a claim.”

A spokesperson for Smith & Williamson, the administrators for London Capital & Finance, said: “On January 30 2019 Finbarr O’Connell, Adam Stephens, Colin Hardman and Henry Shinners of Smith & Williamson LLP were appointed as joint administrators of London Capital & Finance Plc.

"London Capital & Finance was the issuer of mini-bonds which were used for the purposes of making loans to corporate borrowers to provide those borrowers with capital for further investment.

“The administrators are very mindful of bondholders’ and other creditors’ understandable concerns about the current situation.

"The administrators are already in dialogue with the borrowers to ascertain what needs to be done in order to maximise the returns to the bondholders and the other creditors and they are especially focusing on the various loans made by the company to borrowers.

"As part of their work, the administrators are investigating how the mini-bonds were promoted and sold to bondholders.”