2nd April 2013
The Financial Services Compensation Scheme (FSCS) will be changing the way it calculates the compensation due to investors with eligible claims against failed IFAs in relation to CF Arch Cru funds from 1 April 2013.
From April, FSCS will stop processing claims under the “interim-payment” approach announced in April 2012. Instead the FSCS will process claims in accordance with the consumer redress scheme announced by the Financial Services Authority (now replaced by the Financial Conduct Authority) last December, as required by the COMP Rules.
CF Arch Cru claims against failed IFAs decided from 1 April 2013 will be affected by the new method of calculation. Under this method FSCS will follow the approach set by the Financial Conduct Authority to compare the value of an eligible claimant’s CF Arch Cru investment with the value of a suitable alternative investment.
FSCS has already paid compensation to over 1,000 CF Arch Cru investors under the interim-payment approach, and those customers will be unaffected by today’s announcement. Their claims will still be reassessed once the CF Arch Cru losses are known (expected in 2015) to determine if they are entitled to any further compensation. As these compensation claims were settled under the pre-existing COMP rules, FSCS will not revisit these claims under the new consumer redress scheme.
More information about the Financial Conduct Authority’s consumer redress scheme can be found on the FCA’s website.