FSCS Warns against Fraudsters Targeting LCF Victims

<p>The UK’s Financial Services Compensation Scheme (FSCS) issued a warning yesterday (Tuesday) against the rampant scammers targeting the victims of the collapsed London Capital &amp; Finance plc (LCF).
</p><p>Scammers Are Targeting LCF Victims
</p><p>As detailed by the UK agency, these fraudsters are using sophisticated techniques to trap victims. Fraudsters are also impersonating FSCS.
</p><p>“Letters are in circulation on <a href="https://www.financemagnates.com/tag/fscs/">FSCS</a> headed paper. They’re encouraging LCF customers to get in touch so that they may get compensation following the liquidation of LCF assets. These letters are not coming from FSCS. This is a scam, and LCF customers should ignore the letters,” the warning from the FSCS stated.
</p><p>“If you’re ever unsure that a letter or email from FSCS is genuine, contact us directly.”
</p><p>The Collapse of the Mini-Bond Holder
</p><p>LCF was selling unregulated debt securities that could not be transferred, also known as 'mini-bonds'. It then used the funds to invest in various underlying businesses in a risky way and collapsed in 2019, affecting more than 12,000 investors who suffered a combined loss of £236 million. The administration of the failed company went under the control of the FSCS in November 2021.
</p><p>The FSCS closed the LCF compensation scheme on 31 October 2022, with a <a href="https://www.financemagnates.com/forex/regulation/fscs-expects-to-complete-lcf-compensation-by-the-end-of-2020/">lot of delays </a>and three years after the collapse of the company. According to the official numbers, the FSCS compensated 99.5 percent of customers of LCF who were eligible, paying a total of £115 million. Earlier, the government agency also requested the family and kin of the deceased LCF victims.
</p><p>“There are a small number of claims that we have still not been able to pay where we have requested information multiple times but had no reply or where the bondholder has passed away, and we have not been able to locate their next of kin,” the FSCS said earlier. </p><p>“We may be able to pay these claims in exceptional circumstances after 31 October 2022. However, as the government scheme is closing, it may take us longer to process these claims and pay compensation.”
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This article was written by Arnab Shome at www.financemagnates.com.