Boss of Surge Group, parent company of Surge Financial, a digital marketing company, which made millions advertising London Capital & Finance unregulated products, Paul Careless, faces a lawsuit in a separate case of fraudulent advertising.
Yesterday (3 July), Master Matthew Marsh approved an inclusion of Careless in a lawsuit, claiming fraudulent misrepresentation.
Home appliance insurer Domestic & General Insurance, which has nine million UK customers, sued Surge-owned Service Box Group for trademark infringement in December 2018.
D&G applied to the High Court on Monday to include Careless and three other directors as co-defendants so that the claim is directed at the “real wrongdoers” in the wake of the separate investigation against Careless.
Careless was arrested last month by the Serious Fraud Office in the LF&C case and released the same day. D&G claims the circumstances of Careless’s arrest in the LF&C case should serve as “similar fact evidence” to support the insurer’s claim that Careless takes advantage of “unsophisticated consumers for his own financial gain”.
In a skeleton read in front of the High Court on Monday, seen by Money Marketing, D&G’s QC opens the statement with: “This case is about a particularly nasty fraudulent enterprise”, he describes alleged practices of the firm, which included cold-calling.
A D&G spokesman says: “We have taken legal action against what we believe is a rogue trader that has been misleading and taking advantage of consumers, many of them elderly and vulnerable.
“We are pleased that an interim court judgement requires Service Box to cease this behaviour, and we hope it sends a strong deterrent to others seeking to exploit the market.”
A spokeswoman for both Service Box and Surge said: “Our [Service Box] lawyers are vigorously defending these spurious and unfounded allegations.”
Most investors were contacted by marketers
Within its investigation of the LF&C case, the Financial Services Compensation Scheme asked investors to outline what method of communication was used if they received information or advice which influenced their decision to invest.
A poll in a Facebook group for LF&C bondholders asking “how many (of us) had a pre-sales call or email of any kind prior to investing and how many just went through the whole process without speaking to anyone,” revealed that most investors had marketing via emails or calls involved in the process.
The majority (266) ticked the option “Online then the calls started,” another 155 selected “I had a call or email”. Only 119 people said “I did the whole process online”.
The FSCS investigation into how Surge advised the LF&C bondholders on the investments is ongoing.