The financial lifeboat body has paid out more than £13.5m in compensation against London Capital & Finance as it ramped up its work on the collapsed mini-bond provider.
In an update on its website the Financial Services Compensation Scheme confirmed it had issued 844 decisions, but anticipated the volume of decisions, and the rate at which they are decided, to increase in the coming months.
In its previous update at the end of June the scheme said it had at the time issued 281 decisions and paid more than £5m in compensation to LCF customers, meaning at least another 560 claims have reached a conclusion in the last month.
The FSCS initially expected to have ruled on the majority of claims by the end of September, but new evidence saw it extend this timeframe with more customers potentially eligible for compensation.
The body had gained access to an additional 100,000 emails held within LCF’s email server, which could provide further evidence of liability in claims against the collapsed company for misleading advice.
In its latest update the FSCS said: "As we understand more about these claims we will aim to provide a more definite timescale as soon as we can - this is a priority for us and we’re working to pay compensation to LCF customers as quickly as possible.
"We understand this has been a distressing experience for LCF customers and appreciate the patience they have shown."
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.
In recent weeks advisers have voiced anger and frustration at the latest regulatory bill to land on their doorstep, which had rocketed in many cases as a result of growing contributions to the FSCS levy.
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.
Meanwhile earlier this year 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.
rachel.mortimer@ft.com
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