UK Financial Services Compensation Scheme in final stages of investigation into B&G Finance

The UK Financial Services Compensation Scheme (FSCS) today provided an update on its investigation into Basset & Gold Finance Ltd (B&G Finance).

The Scheme has been reviewing the information received from the administrators. It has been examining if B&G Finance owes a civil liability to customers that would enable them to sue the firm in court.

FSCS has determined that B&G Finance may have mis-sold Basset and Gold plc mini-bonds to retail customers from March 1, 2018. Although this investigation may share similarities with London Capital & Finance, B&G Finance Ltd operated under a different structure. It did not issue its own bonds but arranged for customers to buy bonds issued by a different firm.

LCF issued its own bonds – which FSCS considers is not a regulated activity – whereas B&G Finance Ltd carried out the regulated activity of arranging. Because the other requirements under our rules are also met, FSCS may be able to protect many customers of B&G Finance Ltd.

FSCS says it has now moved into the final stages of its investigation and it will start to process in phases the claims received so far. The body cannot confirm when it will be looking at any one individual claim as it needs to contact customers for further information.

However, as soon as the investigation is complete, FSCS will move all submitted claims to its claims processing teams for assessment.

As outlined in previous updates, FSCS is aware that principal firms have provided guidance to customers that were mis-sold their B&G mini-bond between 31 October 2016 – 1 March 2018.

If a customer ‘rolled over’ their investment after 1 March 2018, FSCS will consider their claim against B&G Finance Ltd. For clarity, a roll-over investment would have occurred at the end of a customer’s investment period, where the money was reinvested with Basset & Gold, through B&G Finance Ltd from 1 March 2018.