Exclusive: Retiree horror as Basset & Gold emerges as backer behind payday lender Uncle Buck | London Evening Standard


Investors who invested in collapsed bond investor Basset & Gold today voiced their horror to learn that the company was investing their money in the payday loan offering.

Bondholders said they were told Basset & Gold invested their money in a range of small businesses and, some say, real estate.

In fact, when the business collapsed last month, putting the money of 1,800 retirees at risk, it turned out that almost all of the money had been placed in a payday lender called Uncle Buck. Uncle Buck collapsed, causing Basset & Gold to disappear a few weeks later.

Uncle Buck has been accused in parliament by MP Stella Creasy of offering loans with an APR of 2,500% in 2011 to vulnerable lenders.

Investor Rob Sawyer said he was told the money was invested in properties in London. “It’s disgusting,” he said. “I don’t believe in taking advantage of other people’s misfortunes.”

Another added: “I would never buy a dispossessed house, I would never take advantage of someone in financial difficulty. It’s just my way of being. I was appalled to learn that my savings had been spent on this despicable activity.

Another said: “I was totally disgusted. People who take out loans like this are in serious financial difficulty. They can’t go to banks or building societies. It’s just awful. On top of the fear of losing savings that took me 30 years of work, it’s a double whammy.

The Evening Standard spoke to seven of the investors, all of whom said they had no idea where the money was actually going. One of them, a former 80-year-old city executive, said, “I don’t have an ethical problem with payday loans, but I would never have invested in them because of the risk. I know a lot of them went bankrupt and would never hit them with a pole.

Their abuse allegations appear to be supported by an October 2017 Daily Mail article in which a reporter posing as a potential client of Basset & Gold’s “pension bonds” asked what their money would be invested in.

A transcript of the conversation shows that the reporter allegedly said, “We have a lending platform that contains SMEs. These are UK based companies and FCA approved where applicable. “

In fact, it seems almost all of the money was going into Uncle Buck.

A former Basset & Gold employee who was fired by the company claims to have notified the city’s regulator, the Financial Conduct Authority, in November 2017 of the irregular activity of Basset & Gold. He feared that the company was deliberately targeting the elderly with potentially risky products which, he warned, “will have a negative effect (sic) on vulnerable retirees.”

He said he and his colleagues at the company’s shared offices at Blackfriars and Liverpool Street in London had been asked to tell clients the money had gone to “hundreds” of SMEs. Although he did not know where the money was actually going, he warned that the allegation was “highly implausible”. He also warned of his concerns that the staff did not appear to have financial knowledge.

He claims he was fired when he raised these issues with his superiors at B&G.

He says he didn’t know at the time that the funds were going for payday loans, but noticed that several of his co-workers said they worked in Uncle Buck’s call center.

The FCA declined to comment on the whistleblower’s claims, or why Basset & Gold had been allowed to continue selling bonds to the public from the time of his complaint in 2017 until May of last year.

A guard dog that didn’t bite

The regulator said it has been taking action since 2018 regarding the promotion and sale of the bonds. He said that action resulted in Basset & Gold sending a letter to bondholders in January 2019 clarifying the truth about where their money is going.

The letter said their funds were invested in an unnamed “FCA regulated lender” (not called Uncle Buck) with only 2% in real estate development.

However, while the letter admitted that this meant its investments were not diversified, in bold it said the company was “happy with the way the investment is working and the underlying distribution of loans among dozens. of thousands of borrowers offers high levels of predictability and resilience. “

In fact, Uncle Buck’s accounts indicate that in 2018 and 2019 he saw “a significant increase” in consumer complaints successfully arguing that these were wrongly issued loans that they could not. never repay. In the two years leading up to March 2019 – just two months after Basset & Gold wrote to investors praising the ‘predictability and resilience’ of its investments, Uncle Buck had paid £ 816,000 in fees to the financial mediator and compensation to the clients.

The FCA, which regulated Uncle Buck, was far more concerned about Uncle Buck’s finances than Basset & Gold appeared to be in this letter to investors. The regulator told the Evening Standard: “It was evident in early 2019 that Uncle Buck was in a worsening financial situation.”

Asked why, given its knowledge of this situation, it authorized Basset & Gold to issue such a reassuring statement to its bondholders, the FCA declined to comment. Sources suggested that he did not have the power to make her change the language.

The FCA says it has worked with Uncle Buck throughout this year to enable them to bring in more funding. “We have also strongly encouraged Basset & Gold plc to hold more capital to protect bondholders’ interests. “

None of this was apparent in Basset & Gold’s letter to its investors. In May 2019, Basset & Gold stopped selling bonds to retail investors and within a year she was dead.

Basset & Gold executives could not be reached for comment.

Uncle Buck’s founder, former Catford pawnbroker Steve Murray, did not respond to requests for comment.

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