Daily Mirror (Northern Ireland)
CAR FIRM PUTS BRAKES ON MISLEADING ADVERT
Savers might have been tempted by an advert for an investment that promised a huge return of 27% and boasted of a 100% repayment record.
It was placed by buy2letcars.com, whose business model is to use investors’ money to buy cars which generate income when leased, the target market being people with poor credit histories.
There was, however, an important omission from the advert – it broke rules on financial promotions by not giving any risk warning.
Buy2letcars Limited has two directors, 51-year-old Reginald Larry-cole and Scott Martin, 42. Mr Martin told me that the omission was an error caused by “a recent graphics update”, adding: “I have informed our marketing team who will submit a revised copy featuring the appropriate risk warning.”
The parent company of Buy2letcars is Raedex Consortium Limited, which is regulated by the Financial Conduct Authority. According to its latest accounts, which are unaudited, it is £10.9million in the red.
The directors assure me that there’s nothing for investors to worry about because the figures give an unfairly bleak picture of the business by not recognising the value of its contracts to lease cars.
“With this in mind we interviewed a few accounting firms, of which we found one who took the time to study the original model and came up with ways of recognising the true picture, which will be represented in our accounts over the coming years as the legacy falls away,” said Mr Martin.
“Our commercial environment remains sound and we will be here to serve our clients for years to come.”
I do hope so, because the latest accounts show that it owes more than £26million to creditors and the investment is not covered by Financial Services Compensation Scheme.
It broke rules on financial promotions by not giving any risk warning