UK FSCS passes claims related to illegal ‘Midas scheme’ to assessment teams
The Financial Services Compensation Scheme expects to complete all claims by the end of July 2020, subject to any extra information requirements.
The UK Financial Services Compensation Scheme (FSCS) today published an update or those affected by the failure of Midas Financial Solutions (Scotland) Ltd.
FSCS says it has now passed claims relating to the illegal ‘Midas scheme’ to its claims assessment teams. The body started paying compensation to victims from May 1, 2020. FSCS expects to complete all claims by the end of July 2020, subject to any extra information requirements.
Earlier, FSCS had concluded that Midas Financial Solutions (Scotland) Ltd owed a civil liability to investors of the illegal ‘Midas scheme’. Consequently, eligible victims will now receive compensation.
Thanks to FSCS’s collaboration with the Financial Conduct Authority (FCA) it has been possible to set up claims using FCA investor data. Where FSCS received investor details from the FCA, those customers did not need to complete an online claims application.
FSCS says it has contacted by mail all the customers passed to it by the FCA, confirming they are eligible to receive compensation. However, it is possible that some investors in the illegal ‘Midas scheme’ were not known to FCA. So their details will not have been passed on to FSCS. Such customers are advised to make a claim via FSCS’s online claims portal. This is only in relation to the illegal ‘Midas scheme’.
Some customers may have been told that they would receive their compensation by the end of April. Unfortunately, FSCS was unable to complete payments by this date. The body says it will compensate eligible customers as quickly as possible.
In February this year, FSCS said it was investigating the activities of Midas and, in particular, advice given to customers to invest in high-interest short term deposit accounts. The investments were touted as carrying attractive guaranteed returns placed on favourable terms due to the owner’s relationship with a well-known high street bank.
In reality, however, the high-interest accounts had never existed. Instead, investors’ money was placed into a so-called ‘Ponzi Scheme’ operated by the owner of Midas.
