The Financial Services Compensation Scheme is set to close the London Capital & Finance (LCF) scheme it set up to provide redress to victims of the firm’s collapse.

More than 12,300 investors LCF ‘mini-bonds’ faced collective losses of £237m when the firm failed in 2019.

The FSCS, which has been running a government-backed compensation scheme, has so far paid over £114m to victims.

In a final push to ensure compensation is paid to everyone due it, the FSCS has also asked family members of LCF bondholders who may have died to get in touch as soon as possible.

The FSCS says some LCF bondholders, many of whom lost life savings and nest eggs, have died since they made their investment. The FSCS has been able to contact some families or executors for most of these bondholders, but says there are a “small number” it has been unable to trace.

Some compensation cheques have been issued but not cashed, the FSCS said earlier this year.

Mini-bond provider London Capital & Finance collapsed in 2019, ripping off thousands of small investors.

Many of the victims were on modest incomes but were lured in by promises of high returns for minimum risk.

Initially the FSCS said that many LCF claims were likely to be outside its remit as not all investments were FCA regulated as some of the money was used to make loans to third parties, mainly property firms.

However after pressure on the Government from MPs and critics, the government stepped in to provide a wider compensation package administered by the FSCS and designed to compensate nearly all bondholders who had been missed out on the initial round of compensation. 

The vast majority of bondholders have now been compensated, most of them by April this year.

In the past few months it has emerged that some scammers have been targeting compensated bondholders with bogus investment offers.

The FSCS can be contacted on 0800 091 0030.