The FSCS has recouped £28m from Norwich & Peterborough (N&P) after the building society admitted it mis-sold investors Keydata products, putting levy payers in line for a rebate.
This month the FSA fined N&P £1.4m for mis-selling Keydata investments, and the building society will have to payout approximately £51m in redress to customers.
The £28m is for compensation the FSCS paid to N&P Keydata customers while the building society continued to deny responsibility for giving investors unsuitable advice.
FSCS chief executive Mark Neale, said levy payers - who this year shelled out £326m in an interim bill mainly related to the cost of Keydata products - will benefit from the recovery.
"This is a positive development for both consumers and our levy payers. It is likely that N&P customers will receive a higher amount overall than they would otherwise have received from the FSCS.
"At the same time, our levy payers will benefit as a consequence of this significant recovery," he said.
However the FSCS has already said it will prioritise the fund management sector ahead of IFAs when it rebates the interim levy with any recoveries linked to Keydata.
Neale hinted N&P will not be the last firm forced to repay the scheme, saying the the FSCS intends to pursue further recoveries from other firms where it has paid out compensation costs in relation to Keydata.
Spent 56 years at Schroders
Warns on profits
Hargreave Hale seeking legal advice