The Serious Fraud Office has made an arrest and raided two residential premises as part of an investigation into a company that operated a car hire investment scheme promising returns of up to 11% a year.

The SFO is investigating the activities of Raedex Consortium, which runs a string of companies including Buy2Let Cars, PayGo Cars, Wheels4Sure and Rent2Own Cars.

Buy2Let Cars promised annual returns of between 7% and 11% to investors who lent the company a minimum of £7,000 over three years. It claimed there was “a lot of money to be made” in this sector.

The company used the money that was invested to buy new cars, which it then leased to people with a poor credit history via Wheels4Sure. Investors received monthly payments over the term of the loan, with interest paid at the end of the term.

On 16 March, Buy2Let Cars and its parent company, Raedex, entered administration, weeks after the Financial Conduct Authority told it to stop taking new business.

Despite this, at the time of writing, the Buy2Let Cars website was still up and running, and was even allowing people to download an investment brochure. This claims that Buy2Let Cars bridges a gap in the market “that provides investors with a way into the lucrative car leasing market” currently monopolised by banks and finance companies.

It says Buy2Let Cars was established in 2012 along with Wheels4Sure as a “unique business model offering an elegant solution for investors to get a higher return on their money, and drivers to lease a brand-new car with full manufacturer’s warranty”.

The SFO, which conducted the raids on Thursday with the assistance of the National Crime Agency and the City of London police, said it searched two residential premises in connection with the investigation.

The SFO said one person was arrested and interviewed, and subsequently released pending further investigation, and a second person was also interviewed. “As this is a live investigation, the SFO can provide no further comment,” it said.

The SFO said investors and lessees of the suspected fraudulent schemes can expect an update on the investigation on 10 May.

The investment brochure claims that an investment of between £7,000 and £10,000 would earn a return of 7% a year. Someone putting in £98,000 would be in line to receive a return of 11% a year, and would get back a total of £124,087 at the end of the term, it claims.

Buy2Let Cars also says in the brochure, which dates from 2019, that one individual “has over £2m invested with us”.

The firm regularly held investment seminars and operated a referral scheme where it gave people a link that could be shared via email or social media. If someone clicked on the link and subsequently became a client of Buy2Let Cars, it paid a referral fee of £200. The company also advertised heavily on radio stations.

It claimed its investors had been achieving returns of up to 33% over a 36-month term since 2012. However, in March, the FCA issued a statement about Raedex and Buy2Let Cars, which said: “We continue to caution potential investors seeking to invest in unregulated entities that offer products with high advertised returns. These investments are often too good to be true.”

The FCA ordered Raedex to cease trading in February, citing concerns about its finances. The investment scheme was conducted through Buy2Let Cars, which is not FCA-authorised. However, the cars bought with this money were then leased to customers by Raedex, which is authorised by the FCA.

The regulator said in March that “based on a range of new information which heightened our concerns about the financial viability and structure of the business, we took assertive action to protect consumers and ensure that the firm ceased all regulated activities”.