Breaking: Blackmore Bonds collapses into administration

Blackmore logo 2019

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.

14 thoughts on “Breaking: Blackmore Bonds collapses into administration

  1. And here we go again! Brev, you and I are gaining in notoriety. Apparently you’re me or I’m you! Did you know that? Nicely stated, once again Brev!

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  2. Quietly forgotten however is the Blackmore Global incarnation of Nunn & McCreesh – the Isle of Man domiciled unregulated collective that hundreds of UK defined benefit pensions were transferred into via QROPS in the IoM – Kreston, Malta and Hong Kong based QROPS, to name just three that I have hard evidence of.

    These victims have no idea their pensions are haemorrhaging money in fees to a useless life bond that wraps their investments inside the QROP wrapper. Then there’s fees to the QROP and fees to Blackmore Global fund itself – not to mention Blackmore Global has no audited accounts to date so no one knows what financial state the fund is in.

    Nunn & McCreesh will no doubt start a new venture and this will all be repeated under a different name …. it’s a never ending cycle … round and round and round …..

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  3. As far as I know Blackmore ISAs are exactly the same as unwrapped Blackmore bonds apart from the tax status. A Blackmore ISA is just an anti-tax shield around a loan to Blackmore Bonds plc, the same loans that non ISA Blackmore investors hold. So in short, they’re bust too.

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  4. It is unclear which report of how Blackmore got into administration is correct. Brev is normally quite accurate but reports the Security Trustee instigated the administration on the basis of the money marketing report .

    However there is a group of bondholders that clubbed together to fund a lawyer to initiate a Wind Up Petition (WUP) in the High Court. My understanding was the Security Trustee would act only when it received 50% of the Bondholders requesting it.

    Other news media reports the administration was the result of the action in the High Court by the group of Bondholders.

    I am inclined to believe the WUP by the bondholders was the mechanism, not Oak, from all the chatter on facebook – there are two groups, one closed and one open. The closed one is run by the bondholder that started the collection to initiate the WUP. The open one is run by Angie Brooks of pension-life.com. Many victims belong to both.

    The open group is uncensored but in my opinion very unproductive, creating much confusion with conflicting reports and opinions centred around 3 key organisations: Oak, and Goji, the latter I believe holds some bondholders via an ISA.

    The 3rd organisation, Northernlight Surety, I believe underwrites the Capital Guarantee Scheme which supposedly will make up the difference between what the bondholders get from administration and their intial investment. There are however, conditions which can (and most likely will) invalidate that insurance, meaning there will be no payout.

    You begin to realise the importance of shielding retail investors from high risk unregulated products when you read the comments on the facebook group. These people had no idea – and still don’t – of the risk they were taking by investing their money in these bonds. Some threw everything they had into these bonds – so had no idea of “asset allocation” either. Their ignorance was clearly used as leverage by Surge Financial – the promoters. Investors were duped by the phrases “asset backed” – which Brev has constantly explained is no security if the asset value doesn’t return what you’ve invested – and the Capital Guarantee Scheme.

    However, I am told that because Blackmore promotional material had section 21 approval, it was permissible to promote them to retail clients. A controversial topic that has created much discussion on this site before. I am no authority in this so cannot comment.

    There is something very wrong with the system in my opinion and people will continue to be victims until it changes.

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  5. On the question of who initiated the administration, I relied on the Money Marketing report for the article, but believe Steve has the right of it. I previously reported on the investors approaching D&P back in January. The Security Trustee probably had some kind of hand in the process, but in my experience of how Security Trustees act, without the action of individual investors, the Security Trustee would have been happy to carry on swallowing Blackmore’s excuses indefinitely.

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  6. I really, really hope that none of the stricken investors get sucked into the Angie Brooks recovery scam mechanism exposed by radio 4’s excellent You and Yours programme recently. An unlicensed ambulance chaser preying on these poor people just to try and get the liquidator of Reigate Town Club off her back.

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  7. @Alf. I am not convinced the Radio 4 report you reference was “accurate”. The problem with it for me, was the jouranlist was relying on information “half-inched” by a disgruntled ex-employee seeking revenge.

    I know (from direct personal experience) that if there is a “settlement” being negotiated between the victim and the – for want of a better word – “facilitator” of a scam, then, in order to ensure the settlement proceeds, Angie will take down blogs if the “facilitator” makes it a condition.

    I know this can and does happen because she took down a blog or two she wrote about my receiving trustee in Malta, because they were not going to cooperate to get my pension back otherwise. So to ensure the blogs didn’t become an obstacle, or an excuse, by the trustee not to cooperate, I asked her to take them down and she did. This type of situation didn’t feature in the programme – perhaps because the truth can be boring and deflate the headline!

    We are not in full possession of the facts and knowing one of the sources of information the reporter used was a disgruntled ex-employee, I can’t help feeling we were fed fake news – which is all too prevalent these days – just to get a headline and we were not given an in depth investigation.

    I think the reporter could have been used but we’ll never know if we aren’t given the documents the reporter claimed to have based her article on.

    So I am not convinced it can be described as “excellent”. I feel the programme must be taken with a pinch of salt.

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  8. @Stephen Totally agree – we are not in full possession of the facts, I’m not sure anybody is where Brooks is concerned. She makes it up as she goes along. However, there was an IFA on the show, a correctly authorised, practicing and verifiable individual, who attested (on air) that Brooks had outlined her scheme to him and then attempted to extort monies from him. On that sole point, I asked myself two questions

    1) Why would he say it if untrue? He’s a UK-regulated IFA with a lot to lose by making any comments that might bring him or his profession into disrepute. Brooks – a purported barrister running an unlicensed claims management firm.

    2) An organisation the size of the BBC will have all manner of checks and balances in place to avoid broadcasting anything they know to be untrue as they are an obvious target for litigation having deep pockets. It is telling that in spite of the squawking from Spain the BBC haven’t retracted any of the piece.

    It would be interesting to understand how much latitude you feel there is in the “pinch of salt” to which you refer. Brooks certainly operates on the maxim of “there is no smoke without fire” so lets wash that down with another silly platitude “if she lives by the sword, she’ll die by the sword.”

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  9. @Alf, I can’t answer your 1 & 2 either. They are good questions but for me they remain still open. Your “answers” don’t follow.

    All I know is there are other, less sinister scenarios that explain the allegations made by the BBC – mine for example – but were not offered as possible explanations to balance the report and nor did the BBC seek to investigate other scenarios. I do know that they have my contact details since I had been in contact with Shari’s co-worker, back in 2017.

    I can’t explain the IFA’s “testimony” but even “reputable” politicians are known to bend the truth. It isn’t unlawful to lie – except under oath – so he really has nothing whatsoever to lose.

    There are some IFA’s that do far worse to bring their profession into disrepute – and again I have direct experience!

    I engaged the services of an IFA to assist me repatriate my pension back in 2016. At the critical moment, after many months, when the money was being transferred back to the UK, to a UK regulated scheme, he just disappeared off the face of the earth. The receiving scheme provider would contact me asking where he was because they couldn’t reach him. I too couldn’t reach him for months. Then I found this:

    https://www.watfordobserver.co.uk/news/14760571.man-from-rickmansworth-charged-with-attempting-to-meet-underage-girl/

    Seriously? What were the chances? I am clearly not the luckiest person in the world. I had to find another IFA to help me complete the transfer. So it is not safe to assume IFA’s are whiter than white. There’s good and bad everywhere and it’s nigh on impossible to spot one from another – that’s life.

    Also, in this day and age of fake news I would not just take it for granted the BBC are whiter than white either when it comes to accurate reporting and avoiding fake news. The BBC are constrained to delivering big headlines for as little cost as they can, just like every other news outlet. That’s how the world turns. They aren’t Saints. They too can get it wrong.

    The BBC are not going to retract any of the piece because they know their legal resources far outweigh those of Angie’s and therefore she could not take them on.

    All I know is, without evidence, the BBC story is no more than hearsay by people and motives I [we] don’t know.

    In the light of no evidence being produced by the BBC, I can only compare the allegations and hearsay with my own experience and the two don’t match exactly, so for me the jury is still out.

    I have an open mind but I want to see hard evidence before I come to any conclusion. So far no one has produced any evidence. The BBC have my email address. I did ask but they didn’t comply.

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  10. What Stephen says has the ring of reality to me. I am not actively involved in recovering money for any investors in failed unregulated investments. However, I have frequently been contacted by people asking me to remove comments from Bond Review, because they have been told by an unregulated investment that if they remove the negative comments they have left, the scheme will let them have their money out.

    Mathematics dictates that only a tiny minority can get their money back this way (if the investment is eventually going to fail), but I’m not here to stop that minority getting their money back, and their comments are their property.

    So it is plausible that it is possible to get money out of an unregulated investment for a small handful of people by putting up critical blogs and then taking them down in return for individual investors’ money. It’s essentially the same thing, only the catalyst for persuading the scheme to return the money is a third party’s article instead of the investor’s own comment.

    This of course generaly only applies to a scheme that is still trading. If it has already collapsed, it is near-certain that nobody is going to be able to recover investors’ money en masse, regardless of their qualifications, the money is gone. The exception is if recourse to the FOS and FSCS is available, in which case investors should do the job themselves, as third-party claims management companies cost a huge amount and have a lower success rate than going direct. Anyone whose finances are not managed by an attorney is capable of making a successful claim to the FOS and FSCS when one is available.

    The other allegations in the BBC piece I can’t comment on.

    Having read Brooks’ own hatchet job on Flying Colours I can see why Guy Myles was very cross. I remember reading that blog at the time it came out and wondering why on earth Brooks had a bee in her bonnet about an unremarkable network of IFAs which judging by her own article hadn’t actually done anything dodgy.

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  11. “Anyone … is capable of making a successful claim to the FOS and FSCS when one is available” … I would also add the Pensions Ombudsman … and yes, I agree.

    I made a successful complaint to the Pensions Ombudsman against my ceding provider for maladministration – long story!

    Basically, any person/organisation in the chain of events that led you to invest in an unsuitable investment, that owed you a duty of care – a legal obligation to act in your best interest – but failed to discharge that duty, can be held accountable for your losses.

    It isn’t impossible but isn’t easy either. It is actually a ridiculously long process. I submitted my complaint to the POS in Sep 2018 and it finally came to a successful conclusion in Feb 2020!

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