The Financial Services Compensation Scheme said today it has made the first pay-outs - totalling just under £2.7m - to 135 victims of the LCF mini-bond firm collapse.

The compensation is in relation to 151 bonds invested following transfers out of stocks and shares ISAs,

The FSCS says it has made these payments "automatically" without the need for these customers to submit an application.

While the payments will be welcomed by some victims, many thousands of LCF mini-bond clients remain in the dark about whether they will be compensated.

FSCS says it has compensated these customers because arranging a transfer out of a stocks and shares ISA is a regulated activity. 

The FSCS says that any customer who expected to receive compensation in relation to bonds - which were invested following transfers out of stocks and shares ISAs - who has not received a letter from the FSCS by 24 February, is invited to provide evidence to FSCS. More information about this is available on the FSCS website in the LCF Q&A section.

The FSCS says it has concluded there will be some customers who were given misleading advice by LCF and so have "valid claims for compensation."

The FSCS said today: "In relation to advice claims, we are continuing to review the evidence we hold. At this stage customers do not need to submit a claim to FSCS. We will provide a further update to customers by the end of March 2020."

Caroline Rainbird, FSCS's chief executive said: "We appreciate that this is a difficult time for the majority of LCF's customers who are still waiting to find out if they are entitled to compensation. FSCS is making progress in finalising its arrangements for reviewing advice claims and is committed to ensuring the process is as quick and as easy as possible for customers."