Britain's Financial Services Compensation Scheme (FSCS) has said it expects to find more clients of London Capital & Finance (LC&F) who received 'misleading advice' are elligible for compensation.
The FSCS said yesterday it has already started paying compensation to customers on the basis of 281 decisions and paid £5,155,344 in compensation to LCF clients.
LC&F, a provider of mini-bonds, went into administration at the end of last year, before collapsing in January.
Last week, the FCA passed a permanent ban on the mass marketing of mini-bonds. LC&F sold more than £230m worth of mini-bonds to more than 11,000 clients. Many view the fact the mini-bonds were authorised by the FCA as one of the regulator's biggest failings.
In an update on its website, the FSCS said: "Having worked hard to simplify the process as much as possible for LC&F customers, we are pleased we have now started paying compensation.
"We appreciate this process has taken time and that LC&F customers have been extremely patient. As we move through this process, we want to assure customers that we're working as quickly as we can to get LC&F customers back on track," the update read.