FSCS provides update on London Capital & Finance case

Maria Nikolova

The Financial Services Compensation Scheme says it has made some progress in gathering and examining information and evidence.

The UK Financial Services Compensation Scheme (FSCS) has just posted an update on the London Capital & Finance case.

The Scheme explains that, since its previous update, it has made some progress in gathering and examining information and evidence. This includes obtaining further records from Surge Financial Ltd of customers’ contact with them. The Scheme is also continuing to work with Smith & Williamson LLP, the joint administrators of LCF, to obtain further information to assist with its investigations.

Surge is an online marketing company which acted on behalf of LCF, facilitating bond applications from prospective bondholders. Following an initial review of its call recordings and emails to investors, FSCS believes that Surge, acting on behalf of LCF, provided some LCF clients with misleading advice, in both telephone calls and emails. The further records which have been shared with FSCS are set to help the body determine whether LCF customers are eligible for compensation.

A further 2,200 people have completed FSCS’s fact-finding questionnaire. This takes the total to 7,511, which represents around three-quarters of LCF customers. The Scheme encourages the remaining LCF customers to complete the questionnaire. This will in no way prejudice any future claim they may have with FSCS.

Claiming with FSCS directly means a customer gets 100% of the compensation they are owed, up to a limit of £85,000, as the Scheme provides a free service to customers.

LCF, which was originally set up in July 2012 as a commercial finance provider to UK companies, sold mini-bonds from September 2013, with trading significantly increasing from 2015 onwards. As LCF only became fully authorised on June 7, 2016, FSCS protection can only apply in relation to regulated activity carried out after this date.

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