The City watchdog has slammed high-risk bond issuer London Capital & Finance for its advertising on controversial price comparison websites, whose practices were revealed in the Standard.
The Financial Conduct Authority has frozen LC&F’s activities while investigating its business, meaning its 14,000 bondholders are unable to receive their coupon payments.
It emerged in a supervisory notice that the FCA’s concerns include LCF’s ads via sites including Top-isa-rates.co.uk and Best-savings-rate.co.uk. In the ads, LC&F misleadingly describes its products as “fixed-rate ISA or Bond”. In fact, the bonds, promising 8% interest, are not Isa qualifying, the FCA said. LC&F said that was a “misunderstanding”.
The FCA probe continues.
The Standard has disclosed how Top-isa and Best-savings compared low-risk savings products from the likes of Coventry Building Society paying 1% to 2% interest with LC&F’s at 8%, without adequately explaining they were very different products.
Both websites were operated by a director and staff of Surge, a company paid large commissions by LC&F as its marketing partner.
Surge says the sites operate independently and denies wrongdoing.
