Jim Armitage: Regulated or not? This LCF clampdown is long overdue

For David Wilson, a full inquiry into the collapse of London Capital & Finance would come far too late. The 66-year-old retired social care worker has already lost his savings.

Likewise Kath Briers, the single parent caring for two children with mental health problems. As a low-income classroom assistant, it will take decades to save up the thousands she has lost to LCF.

The same goes for all 11,600 savers who stand to lose 80% of their cash.

But a full-blown, public probe by the Treasury Select Committee, which I hope is drawing closer, could trigger a much-needed clampdown on the flourishing market for unregulated high-interest bonds. It may even stop this type of financial disaster ever happening again.

The problem that needs addressing is how such products are getting bought by naive investors without the expertise to assess the risks.

The danger signs of LCF were there if you knew where to look. Company filings revealed it was lending large amounts to a small number of businesses connected by common directors.

But most of the folk who bought LCF bonds had no idea of those red flags or where to find them. All they saw was the Financial Conduct Authority name on the literature and the 8% interest.

But the FCA regulated the firm, not the bonds. Confusing? Surely. Not just for the public, but for watchdogs, whose jurisdiction is made unclear.

We have to end this ambiguity around part-regulated, part-unregulated finance. Firms and their products should be either under the FCA or not. Simple.

Now the committee’s Nicky Morgan is starting to seek answers, I hope the clampdown is finally coming.

Get stuck in, Nicky.