FSCS provides further clarification on compensation issues to London Capital & Finance customers
The compensation scheme has updated the Q&A section for London Capital & Finance.
Shortly after the UK Financial Services Compensation Scheme (FSCS) announced payments of nearly £2.7 million to 135 customers of London Capital & Finance, the compensation scheme has updated its Q&A section.
In the latest update, the compensation scheme explains that those who received compensation from FSCS for one claim against LCF (e.g., a Stocks & Shares ISA transfer) do not lose their right to make any other claims. The assignment of rights from one customer to FSCS upon receiving compensation only applies to the particular LCF bond for which this customer has been compensated. If a customer has another LCF bond, this customer will still be able to claim for this.
FSCS may add interest to compensation when there is a gap between two dates, such as the date the firm failed and the date FSCS calculated compensation. FSCS applies the Bank of England base-rate to compensation after April 1, 2019.
Customers who have not received any compensation and believe they transferred out of a Stocks & Shares to invest into LCF are invited to provide evidence to FSCS. In such cases, the Scheme will require written confirmation from customers’ previous Stocks & Shares ISA provider of the following;
That the transfer of the Stocks & Shares ISA was direct from the previous provider to LCF;
- The date of the transfer;
- The payment reference(s) – this is usually the LCF bond number;
- The ISA was a Stocks & Shares ISA (not a Cash ISA);
- FSCS will also need a customer’s recent contact and address details – a copy of a recent utility bill or something similar should be sent with one’s response.
Customers with this evidence should send the details to [email protected] and FSCS will aim to give them an update within four weeks.
The body has concluded there will be some customers who were given misleading advice by LCF. These customers have valid claims for compensation, and FSCS is continuing to review the evidence as quickly as possible.
FSCS will update these customers by the end of March 2020. At this stage, these customers do not need to make a claim.
LCF entered administration on January 30, 2019, and since then FSCS has investigated many alternative possible bases for claims. Around 11,600 bondholders purchased 16,700 bonds from LCF worth £237 million.
