If there is one positive from the London Capital & Finance fiasco it is that the whole sorry business has prompted government and regulatory action to stop a repeat of LCF.

Just in case you haven’t heard of this mess, LCF offered mini-bonds at an unrealistically high annual return. It convinced 11,600 investors to pump in £237m of their life savings and then promptly collapsed. 

The Serious Fraud Office is currently all over the case, but enough of the good news.

This week, in the first sign of a regulatory change of heart post-LCF, the FCA published plans to strengthen its rules on financial promotions which offer high returns, a move backed by Financial Planners we spoke to.

The FSCS, in something of a pincer movement, also warned this week that many retirees were being tempted to put some of their nest egg into high risk investments to beat poor savings accounts returns. 

Of course, caveat emptor still applies but it is difficult to persuade a saver fed up with poor savings returns that a product marketed as a ‘bond’ is not a safe place for their cash. And if it offers an 8% annual return even better, at least until it disappears down the drain.

In other good news this week Google and Facebook announced they were cracking down on scam financial ads. So is it all over for the scammers?

The short answer is: I’m afraid not.

This month the FCA has issued warnings about nearly 40 clone or scam website and the number each year runs into the hundreds. Scammers, inevitably, show great ability to change the colour of their spots. That’s after all what they do. When one scam closes they just invent or exploit another. At the moment the scammers are winning.

Despite this there is room for some optimism. A quick Google search check I carried out recently suggests that ads offering very high and unrealistic returns are fewer on the ground than a couple of years ago. Some of the worst offenders seem to have been chased away for now.

The challenge for the FCA now is cracking down on high risk promotions without stifling competition.

Ultimately its role in this may be to prevent the vulnerable from being conned by offers they mistakenly thought were protected by regulation. This may mean some difficult choices including banning or suspending suspect products or firms much quicker in future. To do this will require a whole new apparatus of regulation and it won’t come cheap.

• Have a good Bank Holiday weekend and watch out for our Bank Holiday special email on Monday: 10 Unexpected Stories of 2021. We're taking a well earned day off on Monday and our news service is back on Tuesday. See you then.

Kevin O’Donnell is editor of Financial Planning Today and a financial journalist with 30 years experience. This topical comment on the Financial Planning news appears most weeks. Follow @FPT_Kevin