Investors in some Keydata structured plans who chose not to ‘tick the ISA box' still need clarification on their rights to claim for compensation, a victims' support group argues.
Keydata, placed in administration in June, was declared in default by the Financial Services Compensation Scheme (FSCS) earlier this month, meaning affected customers could begin making claims.
But while KeydataVictims says it welcomes the decision by the FSCS, it says only those customers who invested in some of the products in an ISA wrapper know where they stand.
"The announcement is not all that it seems and fails to address the majority of the cash invested that has been lost," it says.
"The announcement will be of comfort to those who invested in Secure Income Bonds (SIBs) 1-3 in an ISA wrapper and we welcome the statement in this respect.
"However with respect to the investors who didn't invest in an ISA, yet invested in the identical product from the same firm, with the same marketing literature without ticking the ISA box, the situation remains ambiguous and ultimately falls short of giving the investors the comfort we are campaigning for."
It says the Keydata administrators, PricewaterhouseCoopers (PwC), has confirmed most of the missing £103m in SIBs 1-3 falls outside the ISA criteria, meaning the majority of the cash invested "remains in a state of limbo".
"In this regard the FSCS have fallen short," it adds. "Contrast this with the FSCS Icelandic compensation (rapid, without limits and decisive) and we are now seeing a UK financial climate develop wherein it is safer to invest in Reykjavík than in Reading.
"We would ask the FSCS to reconsider their compensation policy and to treat non-ISA investors in SIBs 1-3 in the same manner as ISA investors or indeed Icelandic investors."
Click here for details of who the FSCS says is entitled to make a claim.
To promote 'long-term investment'
Switching 'hard and expensive'
Smaller funds still packing a punch
To drive progress