The Financial Conduct Authority (FCA) has commenced civil proceedings in relation to alleged unauthorised regulated mortgage contracts and sale and rent back agreements.
The proceedings, taking place in the High Court, are against London Property Investments (UK) Limited (LPI), NPI Holdings Limited (NPI), Daniel Stevens (the sole director and shareholder of both companies) and his father Anthony Kafetzis.
The FCA has secured an interim injunction stopping these activities from continuing and a restraint order freezing 17 residential properties worth approximately £3.9m, as well as the defendants’ other assets up to £867,770.
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The FCA has alleged that LPI and NPI carried out regulated activities in the UK without its authorisation or exemption, and LPI communicated financial promotions without the required authorisation or approval.
It has also alleged that Stevens and Kafetzis were knowingly concerned in LPI and NPI’s contraventions.
LPI provides services to financially distressed individuals who face eviction from their homes or who have recently been evicted.
Its services would include dealing with possession proceedings brought by mortgage lenders while arranging replacement finance with third-party lenders, ostensibly to enable the individuals to remain in their homes.
However, the replacement loans would not be explained to the individuals, but were typically high-interest and for amounts greater than the individual’s existing loans, leading to even greater indebtedness.
Individuals would be asked to sign a consent to allow LPI to register a restriction over the individual’s property at the Land Registry.
This would also not be explained, but when the individual attempted to sell their property, LPI would demand a fee of up to 35% of the property value to remove the restriction before any sale could go ahead.
LPI would also tell individuals that it had found another company, NPI, which would buy their house and then rent it back to them, known as ‘sale and rent-back’.
Stevens is the sole shareholder and director of both companies, but this relationship would not be explained to individuals.
Based upon present information, the FCA has suggested that the defendants’ activities have affected dozens of individuals, some of whom are highly vulnerable and who may have lost hundreds of thousands of pounds to the defendants.
The FCA is asking the court to return the ownership of properties to the affected individuals, restitution for individuals who suffered losses as a result of the defendants’ actions, declarations from the court stating that the defendants acted illegally and injunctions to prevent further breaches in the future.