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FSCS pays out split claim after first rejecting case

The Financial Services Compensation Scheme has paid out on a split-cap misselling claim which it had previously rejected for compensation.

In December last year, Money Marketing revealed that the FSCS rejected 60 claims that had been upheld by the Financial Ombudsman Service against split-cap provider BFS Investments which went into administration in February 2006.

The FSCS said it disagreed with the FOS’s definition of “low risk” in relation to split-cap misselling and refused to pay out on the upheld cases. At the time of the administration, BFS had 400 consumer complaints pending at the FOS.

In October last year, one claimant, who does not want to be named, was refused compensation but has now received payment after she threatened to take legal action. She says: “The FSCS has refused to name its expert and his assessment of splits sold at the time. I pointed out to them that they would be obliged to disclose all that if we went to court.”

The FSCS says the U-turn came about after the claimant supplied “new evidence”.

A spokeswoman says: “The new evidence enabled us to find her claim eligible under our rules on the basis that she relied upon non-compliant BFS materials in deciding whether or not to retain her investment.

“The evidence submitted to the FSCS on this case was particular to the individual circumstances of her case. Given that the FSCS assesses claims on a case by case basis, it does not automatically follow that new evidence such as that provided on this case will necessarily result in FSCS reopening other claims on which a decision has already been reached.”

The claimant says: “There was hardly any new evidence for them to consider.”


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