A UCIS is an Unregulated Collective Investment Scheme, an investment fund not authorised by the Financial Conduct Authority. A UCIS pools money from multiple investors and invests it in a wide range of UK-based or even overseas assets.
Typical examples of UCIS investments include international property developments, care and nursing homes, buy-to-let housing portfolios, hotel rooms and student accommodation, or more unusual assets such as car parking spaces, fine wines, or storage pods. Scams involving UCIS have made headline news in recent years, and investors should be very wary of their significant risks.
The FCA, the financial industry’s regulator and watchdog, banned the promotion of UCIS to ‘retail investors’ over a decade ago, deeming these investment schemes suitable only for sophisticated investors or high net worth individuals.
UCIS are high-risk investments, and investors could easily lose all their money if things go wrong. Being unregulated, there is no option to seek compensation through the Financial Ombudsman Service (FOS) which deals with disputes between FCA regulated businesses and its customers, or the Financial Services Compensation Scheme (FSCS), a lifeboat scheme to protect consumers when FCA regulated firms fail.
What are the key characteristics of a UCIS?
+ −- Unregulated by FCA
- Complex investment structure
- Significant risk of financial loss
- Not suitable for the general public
- Difficult to re-sell
- Subject to mis-selling claims and scams
How are UCIS linked to investment scams?
+ −Some Unregulated Collective Investment Schemes are simply scams. The asset they are intended to invest in doesn’t exist, and investors’ money goes straight to the fraudsters.
Other schemes are genuine but may overpromise and underdeliver when it comes to returns. High returns usually come with high risk, so investors should always be wary, carry out full due diligence checks and get professional advice before committing to these schemes.
UCIS may also become illiquid, meaning they cannot easily be bought or sold for their ‘fair’ market value. There may be fewer potential buyers, and sellers may have to accept a lower value to sell the asset quickly.
What should I do if I have invested in a UCIS and lost money?
+ −There are two main avenues to consider if you have lost money through investing in a UCIS.
Firstly, making an Authorised Push Payment (APP) Fraud claim may be possible. APP fraud happens when you are persuaded to transfer money from your bank account via online or telephone banking, believing the transaction to be genuine. Your bank asks you to ‘authorise’ the payment, and you have no reason to suspect it might be a scam or that you have been mis-sold an investment. New rules came into force in October 2024, making it easier to ask your bank to investigate potentially fraudulent transactions and to receive a refund.
The second route to financial redress may be through a Professional Negligence claim. If as part of entering into the transaction, you took professional advice from the likes of a financial adviser, solicitor, accountant or broker and they failed to provide suitable advice or did not disclose all relevant risks, you may be able to make a claim.
For a professional negligence claim to succeed, it would be necessary to show that the advice given was sub-standard, breaching their duty of care to you, and that as a result of that advice you lost out financially.
TLW Solicitors’ view
+ −Sarah Spruce, Legal Director at TLW Solicitors, says:
“We have been helping a wide range of clients who were mis-sold investments or fell victim to financial scams for many years now. If you or a loved one have lost out financially after investing in an Unregulated Collective Investment Scheme but aren’t sure what to do next, please contact my team.
We offer a no-obligation and completely confidential assessment of your circumstances. The team can explore whether you may be eligible to make a ‘no-win, no-fee’ claim to recover your losses. Given our extensive experience, we can go through each of the various options open to you in these often complex cases. If your case goes ahead, we will guide you through the claims process, explaining any legal and financial jargon in plain English throughout.”
Financial mis-selling and professional negligence claims solicitors
+ −TLW Solicitors are specialists in seeking financial compensation for consumers who have lost out. We know what information is required to make a successful claim and where to get it, saving you time and stress. We know which organisations and institutions to deal with, including taking matters to Court if needed.
Speak to us today to find out if you are eligible to make a ‘no-win, no-fee’ compensation claim for your losses. Call 0191 293 1500, email info@tlwsolicitors.co.uk or complete the callback form below.
It is important to get advice as soon as possible, as strict time limits can apply.
Minimum case values apply.
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