Investors who lost money in the London Capital & Finance scandal last year are now being targeted by scammers, the Financial Services Compensation Scheme has warned.
In a statement issued today (February 12) the scheme warned bondholders to be wary of fraudulent messages inviting them to discuss compensation in relation to the collapsed mini-bond provider.
LCF fell into administration in January 2019 having raised in excess of £237m from more than 11,500 investors over the course of two years.
At the beginning of this year the FSCS confirmed it would pay out to 159 of these bondholders, but said it was yet to review thousands more cases involving potentially misleading advice.
Now the lifeboat scheme has warned scammers are contacting LCF customers using social media platforms such as WhatsApp, Facebook and Messenger.
According to the FSCS these messages suggest the bondholder may be eligible for compensation and contain links to "unfamiliar" websites.
The scammers are apparently claiming to be from the FSCS and investors have been urged to be wary of phone calls from strangers or Facebook friend requests from unusual profiles.
The FSCS said: "Do not respond to such messages nor engage in any way with the source. FSCS is aware of these scams and reports them to the appropriate agencies."
In December a High Court heard almost £20m of bondholder funds were transferred to four men connected to LCF in the lead up to the mini-bond provider's collapse.
The details echoed previous warnings from administrators Smith & Williamson pointing to a number of "highly suspicious transactions" involving a small number of connected people which led to large sums of bondholder's money "ending up in their personal possession or control".
LCF allegedly signed clients up to fixed-rate Isas promising 8 per cent interest, with the capital then invested into mini-bonds used to issue loans to small businesses.
The court heard how these mini-bonds proved to be popular with investors, but LCF was only regulated in relation to their promotion and sale and not their issue.
This has led to complications with investors seeking compensation from the Financial Services Compensation Scheme.
The fallout which followed prompted the Financial Conduct Authority to temporarily ban the marketing of mini-bonds to retail investors towards the end of last year.
An independent investigation is currently ongoing into the FCA's own handling of the scandal, with the fate of chief executive Andrew Bailey's bonus resting on its outcome.
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