Some customers of London Capital & Finance set to get compensation, FSCS concludes

Maria Nikolova

Surge Financial Ltd, acting on behalf of LCF, provided a number of LCF clients with misleading advice, the compensation body says.

The UK Financial Services Compensation Scheme (FSCS) has provided a bit of positive news for clients of failed London Capital & Finance.

In an update published on its website today, the Scheme says its investigation into LCF leads it to believe that there are protected claims, which may result in compensation for some of its investors.

“Following an extensive review of LCF’S business practices, we believe that Surge Financial Ltd, acting on behalf of LCF, provided a number of LCF clients with misleading advice. As this is a regulated activity, it means that FSCS protection would be triggered and that there may therefore be a number of customers with eligible claims for compensation”.

At this stage, however, FSCS does not have access to all of the information needed to determine the nature and extent of this misleading advice, and it is still working with the relevant parties on gaining access to it.

FSCS has launched a pre-application questionnaire for investors to complete in order to help the body build a better picture of this advising. Investors may have already completed a questionnaire for the administrators, Smith and Williamson, but FSCS still needs the information to help it better understand individual investor’s circumstances and the number of customers that may have been impacted.

FSCS, which had initially stated that it would not accept claims from LCF clients, has changed its stance since. In its update issued on May 31, 2019, FSCS said that, over the last few weeks it has been reviewing whether there may be grounds for compensation. This work is focused on the relationship between LCF and Surge Financial Ltd and the extent to which either company may have been carrying out regulated advising, arranging or other activities that could give rise to an eligible claim for compensation.

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