The Financial Services Compensation Scheme is to reopen cases brought against advisers in relation to investments in an offshore luxury property scheme after changing the way it calculates losses.
The lifeboat scheme has told FTAdviser it has a list of claimants who received interim payments below the scheme's maximum of up to £85,000, to whom it would now write and pay additional compensation where necessary.
The claims concern The Resort Group assets and were brought against 19 failed advice firms, including British Steel adviser Active Wealth.
The Resort Group's property assets, four hotel developments in Cape Verde, were sold to UK Sipp investors over the past decade in one of two ways - whole hotel rooms and fractional shares in rooms. The group also offers a range of corporate bonds.
This month the FSCS said it would now allow "customers with full ownership of units to utilise independent valuations, and customers with fractional memberships to utilise nil value for the purposes of compensation calculation".
An FSCS spokesperson told FTAdviser: "We have a list of all customers who have received interim payments, that are less than the maximum FSCS compensation limit, and we will re-open these claims and pay any additional compensation due to those customers.
"For customers with full ownership of units, FSCS can accept independent valuations from a certified company, although these will be sense-checked against the value of similar properties on an online property listing website.
"If we have no independent valuation, then we will only be able to use the valuations provided by TRG.
"However, where customers have received a letter from TRG confirming they will be receiving an amount to be paid into their Sipp following the sale of one or more units, we can use the valuation provided, apply 10 per cent uplift and take into account notional pension transfer losses at quantification date."
The FSCS has a maximum compensation limit of £85,000 for firms that failed after April 1, 2019, and £50,000 for firms that failed between January 2010 and that date. Clients of firms that failed prior to 2010 will receive a maximum payment of £48,000.
FTAdviser reported on Monday that FSCS has so far paid out £5.9m on claims of this nature.
Some claimants have since reported that they had only received limited or interim payments due to problems with the assets' valuations.
The FSCS has said it holds details of all those customers and that they did not need to take further action themselves.
"Where customers have received interim/partial compensation for fractional membership investments, they do not need to contact FSCS about receiving further payments," it said.
FTAdviser reported in 2018 how many investors claimed they had been promised guaranteed returns on their investments, only to be disappointed by the returns that materialised - leaving them with Sipp fees that accounted for much of the returns they did receive.
Like many hotel groups across the world The Resort Group has also been impacted by the coronavirus crisis and associated lockdowns.