FCA warns The House Crowd investors against using claims companies

The Financial Conduct Authority (FCA) has warned investors about using third parties to get their money back from The House Crowd, just days after the platform fell into administration.

The peer-to-peer property lending platform announced on Friday 26 February that it has appointed administrators “due to financial issues” facing the company.

Frank Ofonagoro, Jeremy Woodside and Frank Wessely at business advisory firm Quantuma have been named joint administrators with consent from the Financial Conduct Authority.

They said the closure is not expected to have a material impact on investors.

An update on the FCA’s website said borrowers must continue to repay their loans, while Innovative Finance ISA (IFISA) investors should contact HMRC or seek financial advice.

The regulator also warned investors against using claims management companies to recoup their funds.

“We are aware that some companies may approach customers of The House Crowd, offering to help them bring claims against the company,” the FCA said.

“Be cautious if you are approached by one of these companies.

“For the vast majority of The House Crowd’s clients, there is no benefit in involving a third party in making a claim.

“Any customer who believes they have a complaint against the firm should contact joint administrators in the first instance.”

Claims management companies have previously targeted investors involved in failed IFISA providers.

Several law firms took out Google ads that appeared at the top of search results for Basset & Gold when it fell into administration last year.

The FCA is also currently consulting on capping the value of fees that claims management companies can take on pay-outs they win for investors.

Read more: The House Crowd director departs