The Resort Group Related FSCS Claims Reach Over 2400
Industry publication, FT Adviser recently reported that over 2400 claims had been brought by UK investors who purchased shares in a Cape Verde based property scheme. The scheme, known as The Resort Group (TRG), sold fractional shares and rooms in five hotel developments.
Surprisingly, the scheme is still advertising for investment opportunities, even though the Government backed Financial Services Compensation Scheme (FSCS), set up to help victims of failed financial firms, had already paid out £5.9m in compensation by June this year and the Financial Ombudsman Service (FOS) is pursuing hundreds more complaints.
How did mis-selling occur?
Many of the claims relate to UK investors who were advised to transfer their pensions or invest in SIPPs (Self Invested Personal Pensions) that included TRG products. A significant number of complaints against SIPP provider, Rowanmoor, have highlighted a failure to conduct proper due diligence on the investments to be contained within the SIPP.
TRG investments were advertised as offering up to 18% returns over a 3-year period, based largely on what could be achieved through rental income. Covid-19 affected share valuations greatly, and investors did not receive any rental payments when the resorts were closed. But even before the pandemic, investors struggled to sell their hotel rooms or fractional shares when trying to recover their pension investment.
A total of 51 financial advice companies have been involved in TRG investments, including CIB Life & Pensions, Active Wealth, TailorMade Independent, along with SIPPs, Rowanmoor and Greyfriars. TLW Solicitors has previously highlighted Rowanmoor and Greyfriars as well as the early signs of wider issues with TRG.
In the summer, Lloyds Banking Group acquired Rowanmoor’s owners Embark and its subsidiary brands. However, Rowanmoor was excluded from the £390m deal, leaving it to be an independent standalone business.
The FSCS is able to pay out a maximum of £85,000 per person on claims against failed advisers. TRG is unregulated and still trading, so does not qualify for FSCS protection. But many of the UK advisers selling the funds were regulated, meaning claims can still be made. Additionally, claims can also be brought against the SIPP companies for their failure to carry out proper due diligence.
TLW Solicitors’ view
Sarah Spruce, Head of TLWs Professional Negligence Team, said:
“The number of investors who have lost out due to an investment in TRG is significant, with some losing all of their retirement funds. There is another issue – that of ongoing SIPP fees and demands for management charges on fractional ownership properties. Even though there has been little or no income from the investment, investors are still liable for ongoing management charges. If the SIPP cash balance is swallowed up in fees, the SIPP company can send the investor an invoice directly for any outstanding charges.”
Financial Mis-Selling Specialists
Working on a ‘no win – no fee’ basis, TLW’s experienced team can help you through the FSCS compensation process. Our clients are reassured by our knowledge and experience of FSCS procedures and, indeed, we have had FSCS claims successfully upheld for clients whose claims had previously been refused on purely technical grounds. The team can also advise in relation to making a complaint to the FOS and where necessary, start Court proceedings.
TLW Solicitors Can Help
If you are concerned about yours, a friend or loved one’s investment with The Resort Group, please get in touch with TLW Solicitors by calling 0800 169 5925, emailing firstname.lastname@example.org or complete the call back form below.
Time limits can apply and so anyone wishing to bring a claim should do so without delay.
For added TLC, think TLW Solicitors.