The FCA has secured an interim injunction against the alleged operators of an unregulated sale and rentback scheme preventing them from continuing with their business and freezing their assets.

The restraint order secured by the regulator prevents the disposal of 17 residential properties worth around £3.9m and also applies to the defendants’ other assets worth up to £867,770. 

The FCA’s High Court action is against London Property Investments (UK) Limited; NPI Holdings Limited; Daniel Stevens, the sole director and shareholder of both companies; and his father Anthony Kafetzis.

Based upon present information, the FCA believes 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 alleges that:

• LPI and NPI carried out regulated activities in the UK without FCA authorisation or exemption, and LPI communicated financial promotions without the required authorisation or approval.
• Daniel Stevens and Anthony Kafetzis were knowingly concerned in LPI and NPI’s contraventions.

According to the watchdog, LPI provides services to financially distressed individuals who face eviction from their homes or who have recently been evicted. 

These services include dealing with possession proceedings brought by mortgage lenders while arranging alternative lending, ostensibly to enable borrowers to remain in their homes.

However, the FCA says the terms of these replacement loans would not be properly explained to borrowers and were typically high-interest and for larger sums than the existing mortgage, resulting in greater indebtedness.

Home owners would be asked to sign a consent to allow LPI to register a restriction over their property at the Land Registry. 

The FCA says this would also not be explained but, when the individual would attempt to sell their property, LPI would demand a large fee of up to 35 per cent of the property value in order to remove the restriction before any sale can go ahead.

LPI would also tell individuals that it has found another company, NPI, which would buy their house and then rent it back to them – known as “sale and rent-back”.

Daniel Stevens is the sole shareholder and director of both companies. However, this relationship would also not be explained to borrowers.

The FCA is asking the court to return the ownership of properties to the affected individuals.

It is seeking restitution for individuals who suffered losses as a result of the defendants’ actions and declarations from the court stating that the defendants acted illegally. 

The FCA is also pursuing injunctions to prevent further breaches of its rules in the future.

The court proceedings are at an early stage and no date for trial has been set.