The Financial Ombudsman Service is drowning in complaints. Sources confirm the watchdog has been inundated with cases from Britons who say they have lost life savings to a little-known investment scheme that promised guaranteed returns. The scheme, operated by a firm registered in the City of London, is now under investigation by the Serious Fraud Office.
Documents obtained by this newspaper show the ombudsman received 1,247 complaints in the first three months of this year alone, up from 89 in the same period last year. The complaints are almost identical: investors were lured by advertisements promising 8% annual returns, backed by supposed property bonds. But when they tried to withdraw their money, the firm stalled. Then the payments stopped altogether.
‘I lost thousands in savings and my partner’s money is in limbo,’ said one victim, a 62-year-old retired teacher from Manchester. She asked not to be named for fear of reprisals. ‘We were told it was safe. The adverts said “government-regulated”. Now we have nothing.’
The ombudsman has confirmed it is swamped. ‘The volume of cases has overwhelmed our capacity. We are prioritising those involving vulnerable consumers,’ a spokesperson said. But insiders say the system is buckling. ‘We are seeing identical complaints from people who were all sold the same product by the same authorised introducer,’ one source said. ‘The regulator should have spotted this years ago.’
Uncovered documents reveal the firm behind the scheme had been flagged by the Financial Conduct Authority as early as 2019 for ‘potentially misleading marketing’. But no action was taken. The firm continued to operate, changing its name twice in two years. Its directors are linked to a network of shell companies in the British Virgin Islands.
This is not a victimless crime. It is a calculated operation to extract money from ordinary people who trusted the system. The ombudsman can only award compensation up to £350,000 per claim, but the scale of the losses suggests the total could run into tens of millions. The taxpayer may ultimately foot the bill.
The Serious Fraud Office says its investigation is ongoing. Meanwhile, the ombudsman urges anyone affected to come forward. But for many, the damage is done. Their savings are gone. Their trust is broken. And the people who took their money are likely long gone, too.
