Buy2Let Cars (Raedex Consortium): How Refundee has recovered over £12m for investors so far

When investors in Buy2Let Cars first came to Refundee in May 2023, not one of them had been refunded by their bank. Most had been told the same thing: their loss was a "civil dispute", or the bank would wait for the outcome of the Serious Fraud Office (SFO) investigation before deciding anything. While this is standard practice for banks, it is not in line with how banks are supposed to act when they are approached by their customers in cases like this. 

Refundee didn't think that was right so we took on cases and by June 2023 (only 1 month later after investors got in touch) we felt that we had an overwhelming case that investors should have been reimbursed. More than three years on, Refundee has recovered over £12 million for Buy2Let Cars investors, and that figure is still rising. This is one of many examples where Refundee has succeeded in taking group actions on behalf of investors in schemes that have gone wrong. 

This article explains what Buy2Let Cars and its parent company, Raedex Consortium Ltd, offered investors, what went wrong, and how we built a group case to ultimately secure reimbursement for the vast majority of investors. 

If you invested and haven't yet recovered your money, it also sets out the options that may still be open to you but due to time limits, you need to act fast. 

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What was Buy2Let Cars?

Buy2Let Cars Ltd was part of a small group of companies that said it allowed investors to purchase vehicles and rent them out to customers. The group was made up of:

• Raedex Consortium Ltd, trading as Wheels4Sure, which leased cars to drivers and was authorised by the Financial Conduct Authority (FCA) for certain consumer credit and hire activities.
• Buy 2 Let Cars Ltd, an unregulated subsidiary that took money from investors.
• Rent 2 Own Cars Ltd, another unregulated subsidiary that bought the vehicles.

A linked company, Paygo Cars Ltd, sold second-hand vehicles.

How the investment was sold

Buy2Let Cars promoted itself as "your vehicle for financial growth". Its brochures and adverts, which appeared in newspapers, leaflet drops and on billboards, offered:

• returns of 7% to 11% a year, depending on how much was invested
• investment levels from around £7,000 up to £98,000 or more
• a fixed three-year term with fixed monthly payments
• "UK asset backed security"
• a record of "0% default since 2012"

The idea was simple. Your money would fund a specific car, identified by its registration number in your loan agreement. That car would be leased to a vetted UK driver, and the driver's monthly payments would repay you. At the end of the term the car would be sold and you would receive a final exit payment.

Investors were also given two important reassurances. Welcome letters told them that the vehicle they funded would be "secured in your favour... by the way of a fixed charge, which will be registered at Companies House". And, according to the FCA, investors were told that if a driver defaulted and the car had to be sold, they would always get back at least 85% of what they had invested. This matched what many of our clients were told. 

For many people, that security was the deciding factor. It made the scheme look far safer than an ordinary unsecured investment.

How the scheme collapsed

The group failed within a month of an FCA intervention in early 2021. What the regulator and the administrators found raised serious questions about whether investors had received what they were promised.

What the FCA found

The FCA's notice, published in February 2021, set out several concerns:

• Raedex told the FCA it owned around 1,200 cars, but only 69 vehicles had charges registered at Companies House across the three companies.
• In a sample check of 102 registration numbers against DVLA records, 55 cars appeared to be second-hand, two could not be found at all, and 18 leases appeared to start well before the car was on the road.
• The FCA considered the group to be insolvent on a balance sheet basis, with maximum assets of around £14 million against liabilities to investors of around £34 million.

What the administrators found

The administrators' proposals, dated 7 May 2021, reported that the group had 3,609 loan agreements with 834 investors, but only 596 vehicles, of which 435 were leased out. That is fewer than one car for every six loan agreements.

They also found loan documents where no vehicle registration number had been included, and reported that the group had "deviated from the above structure in material respects", with deviations dating back a significant time before their appointment.

The criminal case

The SFO alleges that the former directors gave investors false information and encouraged them to invest while knowing the investments were not backed by the cars they had been promised. The SFO has described it as an £88 million scheme. Both men deny the charges, and no court has made any finding against them.

Where investors stood in May 2023

By the time investors approached Refundee in May 2023, the group had been in administration for more than two years. Many had lost tens of thousands of pounds, and some much more. Yet none of the investors who came to us had received a refund from their bank.

Most had paid Buy2Let Cars by bank transfer. For payments made from 28 May 2019 onwards, most investors banks had signed up to the Contingent Reimbursement Model Code (the CRM Code), a voluntary code designed to reimburse victims of authorised push payment (APP) scams in most circumstances.

Banks were relying on two parts of that code to turn claims down or put them on hold:

• The civil dispute exclusion. The CRM Code does not cover private civil disputes, such as paying a genuine business that then fails to deliver. Banks argued that Buy2Let Cars was a legitimate company that had simply gone bust.
• Waiting for a statutory investigation. The code allows a bank to wait for the outcome of an investigation by a statutory body, such as the SFO, where that outcome "might reasonably inform" its decision. With the SFO's work ongoing, banks told customers they would have to wait, possibly for years. It should be a last resort that banks rely on this exclusion if the case is genuinely complex - rather than the go to reason. 

The way in which investors were dealt with by their banks meant that most didn’t even know that there were reimbursement rules in place to protect them. 

How we built the group case

Refundee is the only professional representative that has conducted a number of cases like this on this scale for a number of years via the Financial Ombudsman Service and we have built out a methodology for this type of case. Cases must be approached in the right way and with the correct amount of evidence before taking them to the Financial Ombudsman Service or they will fail. 

The question under the CRM Code is not whether someone has been convicted. Instead, banks are supposed to conduct a proportionate investigation and make a balance of probabilities decision on the back of that.

One investor's complaint on its own can be easy to dismiss. However, hundreds of investors, each holding a piece of the same picture, are much harder to ignore. That is why we approached Buy2Let Cars as a group action. We spent months reviewing evidence, systematically building our case as to why this was not a civil dispute.

Taking the arguments to the banks and the Ombudsman

We used this evidence to prepare a detailed submission for the banks and the FOS. It evidenced two central points:

1. This was not a civil dispute. The gap between what investors were promised and what actually happened to their money was too wide to be explained by a business simply running into difficulty.
2. Banks should not wait indefinitely. The CRM Code only lets a bank wait where an investigation "might reasonably inform" its decision. Given the weight of evidence already available, we argued that waiting years for a criminal trial was unfair to victims. By this time, most investors would be timed out of reimbursement. 

We then pursued each investor's complaint individually, supported by the shared body of evidence, escalating to the FOS wherever banks would not move. 

The result: over £12 million recovered for 294 investors so far

Refundee has now recovered over £12 million for Buy2Let Cars investors, and more cases are still being resolved. These are people who, in 2023, had been told there was nothing their bank could do for them or had no idea they could approach their bank at all. 

Why the group approach made the difference

No single investor could have assembled the full picture on their own. By pooling documents across hundreds of clients and testing them against regulatory, insolvency and Companies House records, we could show banks and the FOS a consistent pattern rather than an isolated complaint. It takes many years to perfect this approach and therefore only an experienced claims management company should be used to undertake this approach. 

By a very wide margin, Refundee has recovered more than any other claims management company or law firm in group actions through the Financial Ombudsman Service. At the time of writing, Refundee has recovered over £150m of which the majority comes from investment schemes like Raedex Consortium.

You can read more about why clients choose Refundee for a group actions case on our blog. 

How Refundee can help

Refundee specialises in helping people recover money lost to investment scams, and group actions like Buy2Let Cars are a central part of our work. When many people have lost money to the same scheme, we can pool evidence, spot patterns and build a stronger case than any one person could alone.

If you invested in Buy2Let Cars and haven't recovered your money, or your bank has already turned you down, we can review your situation and tell you which route may be open to you. That includes claims to your bank, complaints to the Financial Ombudsman Service and, where relevant, guidance on the FSCS.

You don't have to use a claims management company. You can complain to your bank, the FOS or the FSCS yourself, free of charge. 

If you would like our help, get in touch with our team for a free, no-obligation assessment of your case.

More about Refundee

Here are the technical bits:

Refundee Ltd is a claims management company authorised and regulated by the Financial Conduct Authority in respect of regulated claims management activity FRN: 937096.

Registered with the Information Commissioner's Office; registration number: A8986071.

Registered office address: Refundee, 3rd Floor, 86-90 Paul Street, London, EC2A 4NE.

Registered as a company in England & Wales; number: 12855931.