FCA puts the brakes on Buy2Let Cars
The Financial Conduct Authority (FCA) has ordered car leasing provider Buy2Let Cars to stop writing new agreements and accepting new investments.
The City watchdog has placed restrictions on Raedex Consortium, which owns Buy2Let Cars.
The platform lets investors fund car leasing agreements and advertises interest rates of up to 11 per cent.
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But the regulator has said it is concerned about Raedex Consortium’s finances and has ordered it to cease regulated activity.
This means it cannot arrange any new leases.
Investment in the leases is unregulated but the FCA warned investors against signing up as no new cars can currently be leased out.
It said existing investors should talk to Buy2Let Cars and highlighted that there is no Financial Ombudsman Scheme redress if there are any complaints, nor any Financial Services Compensation Scheme protection if Buy2LetCars closes down.
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“As these investments are loan agreements, as opposed to a liquid investment in marketable securities, for example, it is unlikely that investors will be able to exit,” the FCA said.
“However, as investors have entered into unregulated fixed term loan agreements with differing terms, they should speak to Buy2Let Cars for further information.”
Raedex said that it was “surprised” at the FCA’s decision.
“Although our company is well financed with a strong cashflow and bank balance, the FCA is putting 24 jobs at risk with this bizarre decision,” the company said in a statement to The Times.
“We would like to reassure our customers that we fully intend to challenge this and will be in touch with them directly this week.”
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