Saturday 09 March 2019 2:21 pm | Updated: Monday 03 June 2019 12:54 am

Investors fear £236m given to London Capital & Finance is lost after firm collapses

London Capital & Finance (LCF) has collapsed and thousands of people who collectively invested £236m into a high-risk bond scheme fear they may have lost everything, according to the BBC.

The scheme was marketed as a "Fixed Rate ISA" and the company, now in administration, is under investigation for mis-selling products.

Many of those who put money into an ISA were first-time investors and administrators said they hoped to recoup as much as possible, the BBC report.

LCF pain Brighton-based agency Surge 25 per cent in commission for running the marketing campaign, which amounted to £60m.

Adverts promised 8 per cent returns from the ISAs, while a comparison site with links to Surge compared high street ISAs with returns of 1 per cent and 2 per cent with LCF's higher interest rates.

The firm claimed to by regulated by the Financial Conduct Authority (FCA) but it was only authorised to provide consumer financial advice, not the sale of ISAs or bonds, and was therefore told to cease the adverts.

Adminstrator Finbarr O'Connell told bondholders that returns of 44 per cent would have been needed off of LCF's investments after Surge's £60m payment in order to fulfil its promises.

The funds were also only spread across 12 companies rather than the hundreds promised, while four of them had never filed accounts, nine are less than three years old and nine had loans from the firm itself in 2017.

A lot of the cas was reportedly then sub-loaned on to other companies and bondholders have raised questions over the relationship between directors at the various companies and those who ran LCF.

Former teacher Peter Thornley told the BBC how he may have to return to work after retiring if all his money is lost.

"It put us under a lot of pressure – socially and emotionally. It makes you feel really foolish," he said. "There is a group of us bondholders; there are about 900 in ours.

"We have all got money that we have been left by parents or a lump we got on retirement, then all of a sudden 35 years of savings has gone in a couple of months."

Another retiree, John Wright, told the BBC: "This was money for our grandchildren, we weren't going on fancy holidays or buying flash cars – my wife worked in BHS and saved her whole life, this is hard-earned money, we saved and saved and saved.

"I am devastated, I feel a complete fool. I was completely taken in by the marketing."