The Financial Services Compensation Scheme has recovered about £300m from failed financial services companies over the past five years, which it claims has reduced levies on the industry.
The FSCS seeks to recover compensation paid to consumers from any party that has a legal responsibility in a failed business.
It does this on behalf of the clients of the firms whose legal rights it assumes as it pursues recovery action.
The recovery process can take the form of a formal insolvency process, litigation or dispute resolution.
A FSCS spokesperson said recoveries are only pursued if they pass a "commercial test", if they are worth chasing and if the defendant is "good for the money", but said the FSCS would not pursue recoveries "just to make a point or to punish the parties in question".
Among others the FSCS is currently pursuing recoveries against failed property investment company Harlequin, for which it has compensated more than 2,700 investors who collectively invested more than £125m in the business.
Customers purchased various off-plan property development investments with Harlequin, primarily in Caribbean resorts, but the developments failed and investors' funds were not used to develop the overseas resorts.
The FSCS also reported it recovered "billions of pounds" following the resolutions of the 2008 banking failures, where the lifeboat fund took out loans totalling approximately £20bn from the government during the financial crisis.
The FSCS confirmed these loans have now been repaid in full, largely through its recoveries work.
Mark Neale, chief executive of FSCS, said: "Recoveries are an unsung part of FSCS’s vital work of compensating customers and contributing to confidence in financial services.
"I am very proud of the professionalism of our recoveries team in navigating complex cases to successful outcomes, recoveries will play an essential role in our new strategy for the 2020s."
James Darbyshire, FSCS’s general counsel, said: "The usual avenues of recovery we pursue include actions against the firms we’ve declared in default, and their professional indemnity insurers.
"Increasingly, however, we are taking ever more complex recoveries action, and in those instances we tend to make use of our panel of law firms, who have both the expertise and jurisdictional reach to assist us."