This ‘bricks and mortar’ bond falls through cracks

P.M. writes: My wife and I were looking at investing £20,000 and found the Investment Chronicle website offering a return of 38 per cent in 36 months. My wife requested information and got a prompt call from a salesman who, when she said we might not commit to 36 months, gave a sales pitch offering 15 per cent interest over 12 months. The company’s website mentions the Daily Mail, giving the impression the newspaper sponsors the company, but we now smell a rat.

THERE is nothing wrong with your sense of smell. The Investment Chronicle website has no connection to the Daily Mail, nor is it linked to the long established Investors Chronicle magazine.

The website you found is fairly new. Its controllers are unknown and its internet fees are only paid up until December, which makes me suspect it is not planning to stay around for long. So what was it trying to sell you?

Well, the call to your wife and following email came from a firm in London called My Property Stream. Its website confirms it is marketing bonds – IOUs issued by developers. It pledges: ‘Property investments marketed on this website are secured by bricks and mortar, tangible assets we can touch and feel.’

This assurance is backed by a picture of a modern four-storey apartment building. I traced the building to Preston, Lancashire, but could find no connection to My Property Stream, so I asked its owner and sole director John Gow whether his company does own an interest in the building.

I also asked him to back up his firm’s claim that it has a team of people with ‘decades of experience within the property and i nvestment sectors’. And of course I questioned the use of the Daily Mail’s name. Finally, I questioned whether My Property Stream is a genuine member of the Property Ombudsman scheme, whose logo it uses.

Gow failed to give an answer about the Preston apartment block or his team of experts. He blamed the misuse of the Daily Mail’s name on outside agents he hired, saying ‘ We trialled the services of a marketing company. They are in control of the campaign and content, we simply receive the leads.’

Gow refused to identify the marketers unless I gave him and

My Property Stream anonymity in this report. Fat chance.

But his use of the Property Ombudsman logo is half right. As well as flogging IOUs for builders, My Property Stream sells property itself as an investment and is a member of the Association of International Property Professionals. After a lot of pressing, the Ombudsman confirmed that the AIPP membership does entitle Gow’s customers to lodge complaints with the Ombudsman if necessary.

So does this mean the Property Ombudsman will investigate complaints involving My Property Stream’s sale of IOUs? No. Property Ombudsman Katrine Sporle told me: ‘The business is selling a financial product, not a property.’ Her office would not even look at complaints on this front let alone investigate them.

How about the Financial Conduct Authority? Well, the FCA would not investigate either. Despite a string a failures involvi ng high i nterest, high risk bonds, they fall through a gap in the system. So despite the unidentified sales agents, unnamed property experts, unexplained picture of the Preston apartment, misuse of the Daily Mail name and logo of an Ombudsman with no power, My Property Stream can carry on regardless.

Once more, consumers are on their own.