The Financial Services and Compensation Scheme (FSCS) has issued another £8.4m to investors of the failed mini-bond issuer London Capital & Finance (LCF).
According to a note on the FSCS website, the lifeboat scheme has now issued 844 decisions and paid out more than £13.5m in compensation, an increase from the £5.1m it said it had issued in June (25). It said it expects the volume of decisions to increase further in the coming months.
The note also said: "The specialist team we set up to review these claims are continuing to analyse all the evidence we have collected. We understand this has been a distressing experience for LCF customers and appreciate the patience they have shown."
West Riding Personal Finance Solutions managing director and IFA Neil Liversidge, who has fought to help those who have lost money with LCF, said: "The FSCS payout seems to me to be an attempt, once again, to buy popularity and silence criticism by paying hush money to those who shout the loudest.
"The inference to be drawn from the FSCS decision is that the FSCS levy payers now on the hook for all ‘advice', regulated or not, even if given by the proverbial man in the pub."
Just two weeks ago, advisers saw their annual regulatory bills shoot up to new heights, with an increase in 50% and the FSCS appeared to be to blame. The regulatory bill is the total invoice that comes from the Financial Conduct Authority (FCA), and takes into account the FCA periodic fee, the FSCS levy fee, the Financial Ombudsman Service levy fee, Financial Guidance levy fee, and illegal money lending levy fee.
LCF investor and victim Maria Ballatori said that while she believes all LCF bondholders should be compensated, it is not right that financial advisers should bear the cost. However, she admitted it does not seem like there is another option. She added: "I am very pleased for the bondholders who have been compensated and I appreciate the FSCS' work."
LCF was a mini-bond issuer and, because issuing mini-bonds is not a regulated activity, it did not need to by authorised by the FCA. It collapsed in January last year for mis-selling some £236m worth of mini-bonds to thousands of investors.
In May, the FSCS said it would start issuing decisions on the LCF claims after analysing nearly one million pieces of information. At the time, it said that while some customers received misleading advice and so would be eligible for compensation on the basis, it cautioned many investors did not.
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