LCF victims get £44m marked for compensation

Victims of the London Capital & Finance (LCF) bond scandal have been set aside £44 million in possible compensation in a partial boost for people hurt by the scandal.

Around 11,000 people were left out of pocket from the collapse of LCF and some may be eligible for compensation.

The Financial Services Compensation Scheme, led by Caroline Rainbird, has started to review individual LCF claims related to misleading advice offered by the company, which has gone into administration.

The organisation said it was too early to say how many are eligible for compensation but it has earmarked around £44 million to pay people back.

That has led to an increase in the FSCS levy charged to financial services firms to £649 million.

That is £14 million more than the FSCS had flagged to the market in mid-January and the increase is solely down to the emerging LCF compensation.

Rainbird, below, said: “We know that the industry has expressed concerns about the rising trends in compensation costs and increased levy amounts. I would like to reassure our levy payers that we are working with the industry and regulators to do as much as we can to address these concerns and will keep our levy payers updated on our progress. “

She added that Covid-19 had not altered the FSCS’s practices. “We have continued our business as usual. However, we recognise that business as usual will not be possible for everyone and that some may face challenges due to the current economic situation.”