Customers of bust firm get £42m

Image caption,
Thousands of investors are in line for compensation

Thousands of people have received compensation after losing money because of the collapse of investment firm Keydata.

Keydata went bust in June 2009 and was declared in default by the Financial Services Compensation Scheme (FSCS).

Of 4,400 processed claims from people who invested in Keydata Secure Income Bonds, some 90% qualified for compensation.

The FSCS has so far paid out £42m to these people.

Under the rules, investors who lost money can lodge a claim with the FSCS, which could pay them up to 100% of the first £30,000 lost and 90% of the next £20,000.

The cases of another 600 investors in Keydata's Secure Income Bonds issues 1, 2 and 3 are subject to further investigation.

"We are continuing to work hard to complete these claims as quickly as possible," a FSCS spokesman said.

Other cases

A second group of more than 14,000 people had investments in some of the other Keydata policies. They had not lost their investments, but have been told that their policies were falsely portrayed as Isas.

Of those, 13,500 claims have been returned to the FSCS and 11,950 claims have been resolved. Some 80% of claims that have been resolved resulted in an offer of compensation.

The situation is more cloudy for people who invested in Lifemark bonds, such as its Defined Income Plan and Secure Income Plan, which were distributed in the UK by Keydata. It is not yet known whether these investors have lost their capital.

Lifemark, which is in provisional administration, is based in Luxembourg and is not regulated by the Financial Services Authority, meaning it is not covered by the FSCS.

The compensation scheme said it is currently carrying out detailed investigations and liaising with the FSA, Keydata's administrators and other parties to establish what the situation is for Keydata investors.

It is not yet clear what the implications are for investors, but the FSCS will look at whether Keydata was liable for any losses and whether it could pay out compensation.

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