Britain’s Financial Services Compensation Scheme (FSCS) said today it has paid over £105 million in compensation to 8,500 investors in the collapsed mini-bond provider, London Capital & Finance.
Of this figure, FSCS has contacted more than 700 bondholders with details of their compensation since the lifeboat system provided its last update in December. The last instalment was paid under a government’s redress scheme to reimburse eligible LCF victims.
FSCS said it has yet to contact around 700 bondholders and expects all eligible customers to receive their offer within two months. The letters will include details on what they need to do to accept the offer, the payment terms and some calculation examples.
The government-funded scheme is available to all individual bondholders who have not already compensated by the FSCS. Per the proposed terms, the government would pay 80 percent of the compensation, up to a maximum of £68,000, that LCF clients would have received if they were eligible for FSCS protection.
More becoming eligible for compensation
Those who still want to receive their principal investment in full can reject the offer when the FSCS contacts them by April 20, 2022. Approved claimants are expected to get their payments later this month.
Around 12,000 investors suffered major losses following the £236 million collapse of the mini-bond issuer in 2019. However, more than 3500 bondholders are still waiting to hear if they have any chance of getting their money back.
The Financial Services Compensation Scheme paid compensation to investors who relied on claims for misleading advice in the collapsed mini-bond provider. The fund said it was aware that some customers were advised by independent financial advisers to transfer existing assets to the firm that was put into special administration in May 2017.
To kickstart with the process, the FSCS reviewed almost a million pieces of evidence in order to determine which customers had been given misleading advice by LCF. It has also gained access to an additional 100,000 emails held within LCF’s email server, which extended the time frame to complete the process beyond the original deadlines