The defendants are London Property Investments (LPI), NPI Holdings, Anthony Kafetzis and his son Daniel Stevens who is the sole director and shareholder of both companies.
LPI’s services involved liaising with mortgage lenders regarding possession proceedings against financially distressed people while arranging replacement finance with third party lenders to help homeowners avoid eviction.
The regulator alleges that the companies carried out these activities without FCA authorisation or exemption and also alleges LPI discussed financial promotions without authorisation or approval.
It is also claimed that Stevens and Kafetzis were aware of both firms breaching regulations.
The replacement loans enabling individuals to stay in their homes were not explained to clients and often had higher interest rates than their existing loans, pushing them into further debt.
Clients were then asked to sign a contract allowing LPI to register a restriction on the property with Land Registry, limiting the sales and mortgages which could be applied against the freehold title. When clients attempted to sell their homes, LPI asked for a fee of up to 35 per cent of the property value to remove the restriction.
The FCA alleges this clause was not explained to clients before the contract was signed.
Clients would also be referred to NPI Holdings as an entity which was willing to buy their house and rent it back to them, without informing them of Stevens’ involvement in both firms.
The FCA is asking the High Court to return the ownership of properties to the affected individuals, restore losses which are a result of the defendants’ actions, and declarations from the court that the defendants acted illegally and injunctions to prevent further breaches in the future.
An interim injunction stopping the firms’ activities has been secured, as well as a restraint order freezing 17 residential properties worth approximately £3.9m and the defendants’ other assets up to £867,770.
The FCA believes dozens of individuals have been affected by the defendants including the loss of hundreds of thousands of pounds.
The court proceedings have just begun, and no trial date has been set.