The BBC has shone a light on a huge investment scheme failure this week in Panorama: The Billion Pound Savings Scandal. The show centres on the failure of unregulated investment scheme Blackmore Bond, which collapsed owing investors over £40m.
As per many of these situations, prospective investors were:
- Told that an insurance scheme had guaranteed up to £75,000 of their money
- Given a shiny brochure packed with glittering promises and ‘glowing’ testimonials
- Promised yearly interest payments of up to 10% from a growing and diversified property portfolio
Nevertheless, the scheme collapsed in April 2020 leaving around 2,000 mini-bond investors to suffer a collective loss of £46million. The Financial Conduct Authority (FCA) faced criticism following the broadcast as some believe the organisation has a duty of care.
However, lots of companies, including Blackmore Bonds, are not regulated by the FCA, which:
- Can only act against the firms and individuals it regulates
- Has its powers set by HM Treasury
Despite not paying investors, Blackmore used third-party firms to advertise their bogus mini bonds. Responding in March 2019, the FCA:
- Targeted the bogus adverts
- Withdrew its approval for and shut down the website of a company promoting Blackmore products
These types of unregulated investment schemes are for seasoned investors who understand the risks and have money to lose. The harsh reality is that these companies target everyone, even vulnerable people, as the Panorama programme shows.
At Insolvency & Law, we regularly assist creditors of unregulated investment schemes who find themselves in situations similar to Blackmore victims.
Unregulated investment scheme
Meanwhile, the charming managers of these glossily marketed, but wealth-draining ‘investment’ schemes disappear abroad telling their clients:
“There’s nothing I can do to help. We did warn you there were risks. I’ll let you know if the situation changes. Bye.”
There isn’t an easy answer for unsecured creditors in these circumstances. But there are steps you can take to limit the distress. Due diligence is essential. The number of people who hand over their pensions and life savings without doing any due diligence is remarkably high.
Unless you have money to lose, at the very least make sure you invest in a FCA regulated company. But, if it’s too late for all that, send an email to: firstname.lastname@example.org and we will do our utmost to help you.
This message serves as a warning against potential online scams, including website scams and investment scams. Please exercise caution and conduct thorough research before engaging in any online transactions or investments. Protect your personal and financial information from fraudulent activities, and consult with trusted sources for advice.
Insolvency and Law Peter Murray is an award-winning consultancy firm specialising in Insolvency, debt purchasing and business rescue.