High-risk bond marketer changes tack after FCA halts scheme

The sophisticated sales operation marketing high risk bonds from London Capital & Finance to the public has put its firepower behind another risky investment scheme since LCF had its activities suspended by City regulators.

LCF took in £225 million from the public before the Financial Conduct Authority launched an investigation before Christmas. Many of the 14,000 customers were elderly and now fear for their money. Much of the marketing was done by a company called Surge Financial and RPDigitalServices, a business run from Surge’s offices by one of its senior directors.

Between them, they used a blitzkrieg of online ads to drive potential customers to LCF. Surge would get commissions of 20% or more from LCF when customers’ funds came in.

RP drove most traffic to LCF with websites that look like independent price comparators but which actually favourably compared LCF’s high risk 8% and 9% bonds with low risk, low interest products such as building society cash ISAs.

Now, website monitoring analysis shows the RP comparators are pushing the public to another high-risk bond client of Surge called Blackmore Bonds. Traffic from RP’s controversial price comparison website top-isa-rates to Blackmore has shot up 3297% on the month, and 527% from RP’s best-savings-rate site.

Evening Standard looked into the traffic volumes after readers sent in ads for RP’s top-isa-rates price comparator sent to their social media accounts. Top-isa-rates ads featured images of elderly people with slogans like: “Last time to claim these top 10 ISAs that are taking the UK by storm — don’t miss out!”

Surge has denied any wrongdoing and the comparison sites argue “comparing ISAs like for like is incredibly difficult as there are so many variables”.

Sam Blanning, an IFA at Star House Financial Services said: “I find it difficult to believe unauthorised firms are still brazen enough to push these ads on Facebook while the FCA are investigating LCF — and that any reputable firm would accept investment from them.”

Blackmore invests in property developments which are, by their nature, extremely risky. Analysts said returns on its investments have to be extremely high for it to afford the 9.9% annual returns it promises investors plus the 20% commission to Surge.

Unlike the comparison sites, Blackmore’s website makes clear that investors’ capital is at risk.