Two clients of Reyker Securities are submitting a “test case” claim to the Financial Services Compensation Scheme for charges imposed by Reyker after it took over as custodian following the collapse of Merchant Capital.
Reyker initially charged clients £15 to £25 per investment to receive delayed income payments when it took over as custodian. After becoming plan manager and custodian for Merchant Capital investors last year, it emerged around 12,000 clients would face hundreds of thousands of pounds in extra charges. Merchant Capital was declared in default by the FSCS in April. But it is understood the FSCS is not accepting claims against Merchant Capital that relate to the charges imposed by Reyker. The test case seeks to establish that Reyker’s charges are a civil liability resulting from Merchant’s collapse.
The clients are submitting a claim for £515, the amount they have been charged by Reyker. They argue Merchant failed to meet its obligations to them. The claim states: “Our claim is in relation to Merchant Capital’s civil liability to us for its failure in contract law to arrange safeguarding and administration of our investment at its own cost.”
The FSCS and Reyker declined to comment.