After months of delayed and missing payments and failure to file legally-required accounts, Blackmore Bonds is finally to be taken out back and put out of investors’ misery.
Administrators Duff and Phelps have been appointed by a security trustee (presumably Oak Fund Services (Guernsey) Limited), according to IFA trade rag Money Marketing. The news is little surprise as D&P were originally approached by Blackmore investors in January, seeking answers after months of delayed and missing interest payments.
Duff and Phelps are experienced in winding up investment schemes; they are currently raking over the ashes of collapsed care home scheme Carlauren and were also administrators of one of the biggest of the previous wave of investment scheme collapses, the Connaught Income Fund which collapsed in 2012 causing £118m in investor losses.
I reviewed Blackmore’s bonds in December 2017 and concluded that, despite Blackmore’s claiming to offer “Simple, fixed-rate returns with income certainty” and a “Capital Protection Scheme” backed by an obscure American insurer, the bonds were extremely high risk with an inherent possibility of up to 100% loss.
A year in the collapse of an unregulated investment scheme
In March 2019 Blackmore claimed to be “entirely on track” with return on capital employed rates of 54%.
Our business model is entirely on track and current return on capital employed averages 54 per cent. This has been verified by reputable independent surveying professionals. The first bond maturities are due at the end of 2020 and will be paid in full.
However, at around the same time it amended its website to include a warning that if new investments into Blackmore dried up, existing investors might lose some or all of their money.
There can be no guarantee of investor appetite for the Bonds to the extent predicted by the Company or, indeed, at all. In such circumstances investors may lose some or all of their investment.
Only four months later in July 2019 Blackmore defaulted on its first interest payments, although that money was eventually paid. From October onwards payments to investors dried up entirely.
Blackmore’s bonds were promoted by Surge Financial, the same marketing company as London Capital & Finance which collapsed at the beginning of last year. Blackmore paid 20% of investors’ money to Surge as commission. (Money Marketing says 25% but a belated amendment to Blackmore’s website, and its own accounts, suggest 20%.)
When London Capital and Finance collapsed in early 2019, Blackmore briefly replaced LCF on promotional websites linked to the Surge group, which coincided with a spike in traffic to Blackmore’s website.
Blackmore briefly claimed on its website to be the proud sponsor of the Kent Police rugby team, but withdrew that claim in early 2018. Kent Police said in 2018 that they agreed to accept sponsorship from Surge Financial, but withdrew from the sponsorship arrangement after Surge asked them to change the sponsor to Blackmore instead.
Blackmore also runs an offshore investment fund, Blackmore Global, which has been the subject of complaints from investors whose pensions were transferred into the fund. How the fund is performing is unknown as Blackmore Global does not release performance updates to the public (and, as an unregulated private business, has no obligation to).
Administrator Geoff Bouchier says
There has been concern regarding the company’s affairs for several months so it will be a relief for bondholders that independent professionals have now been appointed to the company.
“Relief” is not how I would describe it, but the announcement of the administration will at least begin the process of closure for Blackmore investors.
How do I get my money back from Blackmore?
If you were advised to invest in Blackmore Bonds by an FCA-regulated adviser, or invested via an FCA-regulated SIPP company without regulated advice, you may be able to recover your money by making a formal complaint to the FCA-regulated company.
If the company refuses to provide compensation, the complaint can be taken to the Financial Ombudsman, which can order compensation up to a defined limit. If the company is unable to pay, you would be covered by the Financial Services Compensation Scheme up to £85,000 per person (for defaults after 1 April 2019).
Investors should avoid Claims Management Companies (CMCs) as they are unnecessary (the FOS and FSCS process is slow but straightforward), often have a lower success rate than direct complaints, and charge eye-watering fees.
If the above does not apply the standard procedure is to write off the investment and treat any recovery as a bonus.
If you invested in Blackmore Bonds, you should be on your guard against anyone contacting you and telling you that they can recover your money. It is highly likely that you will be targeted by fraud recovery fraud. If anyone asks you to pay “legal fees” or “liquidation fees” to release your money it is almost certainly a scam.