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FSCS to review claims against structured products firm

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The Financial Services Compensation Scheme will consider claims against structured products provider Merchant Capital.

The FSCS says it has received a number of claims against Merchant Capital in relation to the charges levied on the payouts of certain investments by Reyker Securities, which took over administration of a number of plans when Merchant went into administration.

The lifeboat fund says it will make a decision on any compensation by the end of November.

Merchant Capital was declared in default in April 2014 after going into voluntary liquidiation. It owed more than £1.5m to creditors.

Reyker Securities became responsible for the administration of the investments and income payments after Merchant Capital defaulted, and levied a charge on maturity payments for some clients.

The FSCS says: “FSCS considers that in certain circumstances Merchant Capital is liable to investors for certain costs where Merchant Capital contracted with investors that no additional costs would be incurred during the lifetime of the investment for standard administration and safeguarding of the investments.”

Reyker initially charged individuals £15 to £25 on their delayed income payments, but it later emerged around 12,000 Merchant Capital investors faced hundreds of thousands of pounds in charges.

In October 2014 two clients of Reyker submitted a test case to the FSCS for compensation.

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  1. Come on Money Marketing, make your readership smile for once with the odd story every now and then about claims that the FSCS has said it WON’T consider 🙂

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