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Compensation scheme pays out £33m for IFA failures

The Financial Services Compensation scheme has paid out more than £33m to consumers as a result of claims on failed IFAs over the past financial year.

In 2008/09, the FSCS received 8,730 claims against IFAs and found that 3,640 justified compensation totalling £33,095,000.

Over 2008/09, the FSCS had just 54 claims against mortgage intermediaries and it deemed only 13 cases suitable for compensation, which totalled £335,700. In 2007, the FSCS paid out no compensation on mortgage intermediary failures.

Norwest Consultants principal Harry Katz says: “How many of these firms are still trading under a different entity and why is it allowed? The companies accused do not pay this levy, guys like me do.”

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