LCF Misleading Advertising Claims Debunked
London Capital & Finance made 5 bullet pointed claims in their advertising which have been completely blown apart by the events of January 2019 after the FCA acted. Initially FCA forced them to cease all their marketing and then to freeze all their assets before LCF called in the Administrators in late January 2019.
This was one of the reasons that the FCA forced London Capital & Finance to remove all their marketing. They are not regulated for investments so investors in their bonds are not protected and have no FSCS protection.
2) 100% Track Record
Another misleading statement. Past performance is no guarantee of the future as LCF investors found out when the 100% track record was no more.
3) Full Asset Backed Security
London Capital & Finance made bold claims about the value of assets that were backing their loans. Unfortunately when you investigate these assets they don't appear to be anything physical and in some cases are loans backed by other loans. Hardly the most secure of assets to be risking your investment.
4) Manage and View Your Investment online
A pretty meaningless option as your money was tied up in your investment for between 1 and 5 years so being able to log in to see a fictional number on a screen meant nothing. Investors can still log in and see a number on screen but unlike a bank the number is not true as there is no FSCS protection as investors are now finding.
5) No Setup Costs, No Fees and No Charges
Probably the most blatantly misleading item from the list. According to their accounts London Capital & Finance were charging setup fees and commission amounting to 25% of the bond value. This is 5x the amount that unit trusts used to charge back in the bad old days of high commission sales via advisers.
For an investor to lose 25% of their bond as soon as they hand the money to LCF is extortionate and makes it virtually impossible to recover the original capital.
It certainly isn't something that can be guaranteed as a return.
1) Authorised and Regulated by FCA
This was one of the reasons that the FCA forced London Capital & Finance to remove all their marketing. They are not regulated for investments so investors in their bonds are not protected and have no FSCS protection.
2) 100% Track Record
Another misleading statement. Past performance is no guarantee of the future as LCF investors found out when the 100% track record was no more.
3) Full Asset Backed Security
London Capital & Finance made bold claims about the value of assets that were backing their loans. Unfortunately when you investigate these assets they don't appear to be anything physical and in some cases are loans backed by other loans. Hardly the most secure of assets to be risking your investment.
4) Manage and View Your Investment online
A pretty meaningless option as your money was tied up in your investment for between 1 and 5 years so being able to log in to see a fictional number on a screen meant nothing. Investors can still log in and see a number on screen but unlike a bank the number is not true as there is no FSCS protection as investors are now finding.
5) No Setup Costs, No Fees and No Charges
Probably the most blatantly misleading item from the list. According to their accounts London Capital & Finance were charging setup fees and commission amounting to 25% of the bond value. This is 5x the amount that unit trusts used to charge back in the bad old days of high commission sales via advisers.
For an investor to lose 25% of their bond as soon as they hand the money to LCF is extortionate and makes it virtually impossible to recover the original capital.
It certainly isn't something that can be guaranteed as a return.
The LCF website also appears to have been deliberately misleading by saying that bonds had a risk but not mentioning that ISAs contained the same bonds.So far the only one of the 5 LCF advert claims that hasn't been comprehensively debunked is that you can view your investment online. As it was a fixed term and fixed amount that was a pointless facility anyway.
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