The Financial Services Compensation Scheme (FSCS) issued a formal caution, warning victims of London Capital & Finance (LCF) of a scam letter doing the rounds. This communication urges those who suffered losses with the liquidation of the stated financial company to get in touch.
FSCS scam alert as letters to LCF victims do the rounds
LCF used to issue mini-bonds and invest the proceeds from these in different businesses. In its warning, the FSCS makes it clear these letters are not from the scheme although they appear on FSCS-headed paper. This organisation advised those targeted to ignore these scam letters and invited them to contact the FSCS directly.
In a November 2022 statement, the Treasury acknowledged that the LCF scheme closed its doors on 31 October 2022. The company went belly-up in less than a year after its launch. At first, LCF would have closed earlier in April 2022 but the FSCS had to extend the deadline as 30 bonds were still outstanding due to expired addresses or other contact details.
Don’t miss out the latest news, subscribe to LeapRate’s newsletter
To date, £115m has been paid to eligible bondholders and finalises most claims. The FSCS may, however, still pay outstanding claims in extraordinary circumstances. Given the LCF closure, the Treasury stated these claims may take longer to process.
In May this year, London’s Southwark Crown Court sentenced the CEO of LCF, Michael Thomas, to 10 months in prison, which sentence was suspended for two years. This followed his admission to a £95,000 luxury splurge that included a saddle and an Italian holiday.
