The UK Financial Services Compensation Scheme (FSCS) is preparing to close the London Capital & Finance (LCF) compensation scheme that FSCS has been administering on behalf of the government.

Some LCF bondholders have sadly passed away since they made their investment. FSCS has managed to contact the families or executors for most of these bondholders, but there are a small number that FSCS has not been able to trace.

If you believe a family member invested in LCF and has since passed away without receiving any compensation from FSCS, please get in touch with the Scheme as soon as possible.

Over the past two years, FSCS has delivered two compensation schemes for LCF customers – one for those eligible for FSCS protection, and another one-off scheme on behalf of HM Treasury.

As of June 2022, FSCS has paid compensation for 12,421 bonds under the government scheme, totalling over £115 million. FSCS was able to hit the 20 April deadline for all customers that it had satisfactory evidence for, with less than 50 outstanding cases (where FSCS has requested documents that have not yet been provided).

LCF was an issuer of mini-bonds, which it stated it used to make loans to corporate borrowers to provide capital for further investment. The FCA’s first supervisory notice raised serious concerns about the company’s promotion and marketing of these bonds to retail investors. Following the FCA’s second notice, LCF soon entered administration on 30 January 2019.

The effect on bondholders, many of whom were elderly customers on fixed incomes seeking better returns on their investments, was catastrophic. A total of 11,625 customers, who had invested a combined £237 million, lost huge amounts of their life savings.