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Fraudulent adviser’s firm declared in default

Two financial advice firms have made the Financial Services Compensation Scheme’s latest list of firms in default.

They include Hertfordshire-based HBFS Financial Services Limited, which hit headlines last year when former managing director Freddy David was charged with obtaining money transfers by deception and fraud by abuse of position by the City of London Police.

The FCA published a note on its website in December 2017 saying that it was working closely with police on an investigation into the firm, advising customers to check the status of any investments made through HBFS.

David was sentenced to six years in prison for defrauding 55 victims out of £14.5m through a Ponzi scheme in July last year. This used the legitimate HBFS business and its name to run a parallel scheme to take investments from victims which were spent on gambling, school fees and holidays.

Oxfordshire’s Seren Independent Advisers Limited also makes the list. The remaining four defaulted firms offered a variety of other financial services, from credit provision to vehicle leasing: Gann Management Limited, Plymouth Caravan Centre Limited, Turnpike Motors Limited, and Well Alley Limited.

Firms are only declared in default by the FSCS when they are found unable to pay compensation claims made against them. Being put into formal default allows the FSCS to being assessing claims against them.

FSCS chief corporate affairs officer Alex Kuczynski says: “FSCS steps in to protect consumers around the UK when authorised financial services firms go bust. This vital service, which is free to consumers, protects your deposits, insurance, investments, home finance and debt management. We want anyone who believes they may be owed money as a result of their dealings with any of these firms to get in touch as we may be able to help you.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. The bitter irony of this is that by the time the FCA becomes aware of such activities the damage has already been done beyond its powers to stop. Yet, because the perpetrator was a regulated individual, the rest of us get landed with the compensation bill (at least up to £150,000 per case).

    There MUST be a way for the FCA to tackle this, even if it means securing powers of access to the bank accounts of all regulated firms and individuals. I, for one, have nothing to hide from the appropriate authorities.

  2. Remember when FIMBRA used to have regional managers who would visit IFA firms to monitor practice and policy, review sample files etc. For the money being paid, surely FCA could do this, rather than just leaving the proverbial to hit the fan and then get someone else to pay even more money to clear up the mess.

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