‘I invested my pension in Buy 2 Let Cars – it’s all lost’

The pension pots and life savings of hundreds of British investors are on the line after a car leasing firm went bust owing £26m.

Raedex Consortium, which owns Buy 2 Let Cars, collapsed in March and is facing an investigation from the Serious Fraud Office after the City watchdog intervened.

Its leading brand, Buy 2 Let Cars, attracted hundreds of savers with the promise of returns of up to 11pc and was widely advertised on TV and radio stations.

However, many who relied on the income from their investment in the firm fear they have lost their money.

The Financial Conduct Authority barred it from entering into any new leases in February on the suspicion that the company was failing and would be unlikely to be able to pay its debts.

But the regulator has been criticised for not acting sooner as some have claimed it was first made aware of “misleading” advertising in 2015 and again alerted to the risks in 2019.

Mark Taber, a consumer campaigner, said he wrote to the FCA in 2019 to raise concerns over Buy 2 Let Cars’ unregulated investment scheme.

Mr Taber said: “I’ve been screaming at the FCA to do something about it for a very long time. The business model didn’t seem to make sense.”

In 2015 Buy 2 Let Cars adverts were deemed “misleading” by the Advertising Standards Authority and allowed to air only on specialised financial channels or stations. However, the promotions continued to run on mainstream channels, Mr Taber said.

He added: “The numbers didn’t add up. It looked like the company was reliant on new investments to pay out to old investors, which I warned the FCA about. My concern is how much money people put in when the FCA could have stopped it earlier.”

Ian Gonzalez, 74, of Ruislip, northwest London, invested an extra £42,000 just 19 days before the FCA stopped the company from trading.

Investments in Buy 2 Let Cars were used to buy cars that were leased out, often to drivers with a poor credit history. The income from the leases and car sales were used to pay investors back with high returns.

Raedex claimed to have about 1,200 leasing customers, according to the FCA, although Companies

House records analysed by the watchdog showed it had charges over only 69 vehicles.

Over the course of seven years Mr Gonzalez, who heard about the investment on LBC radio, invested £314,000. He now fears he has lost it all. He said: “I’ve gone from being fairly well off to counting every penny to survive on my pension.”

Mr Gonzalez, who was receiving around £30,000 from his investment every year, has credit card debts of £40,000. He said he had taken out the loan to add to his investment in Buy 2 Let Cars.

Paul Crane, who asked for his name to be changed, said he had invested close to £ 1m into Buy 2 Let Cars, including all the money he had set aside for his 90- year- old mother’s pension.

He said: “The regular income was all my mother had to survive on – she lives in fear now. The investment is a very large part of my estate. I’m devastated.”

Mr Crane, who is almost 70, said he had relied on the regular income to fund retirement and had sold a property to invest more on the promise of 13.3pc returns.

However, he said both he and his mother might have to sell their homes and move in together to free up cash. Mr Crane invested a further £28,000 in January. He said: “We feel the FCA should have stopped us if they knew that the company was going to fail.”

Andy Evans, head of the Buy 2 Let Cars investor action group, said the firm’s demise had had an “irreparable” impact on lives.

He said: “It’s been heartbreaking to hear so many tragic stories. There is something very wrong with the system. Regulators must find a way to make it harder for these schemes to exist, to react faster when concerns are raised and to stop letting these schemes operate unless they fully understand what is going on behind the scenes.”

A spokesman for the FCA said: “We imposed restrictions on Raedex as we were concerned about its finances. After careful consideration, we stepped in and took assertive action to protect consumers.”

‘I’ve gone from being fairly well off to counting every penny to survive on my pension’

Ian Gonzalez invested more than £300,000, including £42,000 just days before Buy 2 Let Cars collapsed

The company’s adverts were banned