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FSCS investigations reveal protected claims that may result in compensation for some LCF investors

  • After reviewing LCF business practices, including the role of Surge Financial Ltd (Surge), which was acting on behalf of LCF, FSCS has concluded that, in some cases, misleading advice was provided to customers
  • Advising is a regulated activity for which FSCS may pay compensation
  • Further investigations are needed to establish the exact nature of this advising and how many customers this will impact – this will take a number of months
  • In the meantime, FSCS is inviting LCF customers to complete a pre-application questionnaire to help them better understand the facts of investors’ cases
  • It is too early to say what the amount of compensation or the impact on levy-payers will be

The Financial Services Compensation Scheme (FSCS) has today announced that its investigation into London Capital & Finance (LCF) leads it to believe there are protected claims that may result in compensation for some of its investors.

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

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

FSCS has therefore launched a pre-application questionnaire on its website for investors to complete in order to help build a better picture of this advising. The information gathered through this process will help FSCS better understand individual investors’ circumstances and therefore the number of customers that may have been impacted.

A spokesperson for FSCS stated: 

“Throughout our investigation into LCF we have been as transparent as possible so that both LCF investors and our levy payers know where they stand. Having established that there are customers who were given misleading advice and therefore may be eligible for compensation, we now need to determine the full extent of this advising activity.

“We would therefore urge LCF investors to complete the pre-application questionnaire on our website as this will help us enormously in the next stage of our investigation. We expect this will take a number of months, but we will do all we can to come to a decision as quickly as possible.

“If we do start accepting claims, it is important for investors to remember that if they come to us directly there will be no charge to pay as we are a completely free service.”

The questionnaire is available on the dedicated London Capital & Finance section of our website here.

 

Media enquiries

James Tweed - T: 020 7375 8646

Anthony Ozimic - T: 020 7375 8638

Catherine Goodier - T: 020 7375 8631

E: publicrelations@fscs.org.uk

 

Notes for editors

Read more about the remit of FSCS on our Notes for editors page.

 

Channel website: https://www.fscs.org.uk/

Original article link: https://www.fscs.org.uk/about-fscs/media-centre/press-releases/2019/june/fscs-investigations-reveal-that-there-are-protected-claims-which-may-result-in-compensation-for-some-lcf-investors/

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