The lifeboat fund is in the process of paying claims against the collapsed mini-bond provider for misleading advice, but in a statement yesterday (June 25) said new evidence could lead to more customers becoming eligible for compensation.
The FSCS has to date issued 281 decisions and paid more than £5m in compensation to LCF customers, originally expecting to have ruled on the majority of claims by the end of September.
But this month the compensation body gained access to an additional 100,000 emails held within LCF’s email server, which provided further evidence of liability, it said.
The FSCS said: "During June we gained access to an additional 100,000 emails held within LCF’s email server. This evidence provides more information for us to assess.
"While we had expected to reach decisions on the majority of LCF claims by the end of September, assessing this additional information will now extend the timeframe for processing claims. This new evidence is also likely to lead to an increase in the number of LCF customers that will be eligible for compensation.
"We are recalculating the timeframe for processing claims and will provide an update in our next communication before the end of July."
The body said it had set up a specialist team to review advice claims and that customers did not need to take any action.
The FSCS levy to be shouldered by advisers in the coming year has increased by £16m to £229m, predominately as a result of an extra £44m set aside by the lifeboat body earlier this year to meet claims against LCF.
LCF fell into administration in January 2019 owing more than £230m and putting the funds of more than 14,000 bondholders at risk.
The company signed clients up to fixed-rate Isas promising 8 per cent interest, with investors' capital then invested into mini-bonds used to issue loans to small businesses.
The lifeboat body added: "We appreciate this process has taken time and that LCF customers have been extremely patient.
"As we move through this process, we want to assure customers that we’re working as quickly as we can to get LCF customers back on track."
Meanwhile earlier this month the chairman of the City watchdog warned the already "unacceptable" FSCS levy was likely to increase as a result of the coronavirus crisis, with the scheme carrying the cost of "bad behaviour by firms which then fail".
At a UK Finance roundtable Charles Randell called for the system to be redesigned so "polluting firms" in the financial sector paid the bill for high risk and unsuitable investments, not "well-run firms" via the compensation scheme.