Financial Services Compensation Scheme  

FSCS assures minibond work ongoing despite lockdown

FSCS assures minibond work ongoing despite lockdown

The Financial Services Compensation Scheme has moved to reassure investors the service is still assessing the case of collapsed provider London Capital & Finance despite the current coronavirus lockdown. 

In an update today (March 31) the lifeboat fund confirmed it was reviewing almost a million pieces of evidence in an attempt to determine which customers were given misleading advice by LCF.

This evidence includes telephone call recordings, emails and records from LCF's customer database, gathered by the FSCS over the last two months.

The scheme is reviewing thousands of claims for misleading advice, which it has previously confirmed could lead to some customers having valid grounds for compensation.

Caroline Rainbird, chief executive at the FSCS, said the compensation scheme was working hard to review the "vast amount of information" it had gathered.

Ms Rainbird said: "It is vital that we do this to help us understand which LCF customers were given advice so that we can reach decisions on claims. 

"We realise that times of uncertainty can be hugely unsettling. We want to reassure all our customers that we are doing all we can, particularly in light of the ongoing Covid-19 situation, to continue our business as usual to get our customers back on track." 

Before it entered administration in January, LCF raised in excess of £237m from more than 11,500 investors over the course of two years, and it has been embroiled in a scandal since.

The issue of compensation from the FSCS has been a matter of much debate over the past year as mini-bonds are unregulated investments and therefore not protected by the scheme. 

In January the lifeboat body announced it would compensate a mere 159 investors who transferred their savings from external stocks and shares Isa accounts into LCF accounts - a regulated activity. 

rachel.mortimer@ft.com 

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