Thousands of investors fail to claim split-cap compensation

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The Independent Online

More than 40,000 investors who lost money in split-capital investment trusts three years ago, have still not made an application to receive their share of a £144m compensation pot, with just one month to go until the deadline for the claims expires.

An estimated 50,000 individuals lost money between 2000 and 2002 by investing in zero-dividend preference shares, known as "zeroes" - one of three different share classes within split-capital trusts.

However, the commissioner of the fund, Mike Ellis - who is the former finance director of HBOS - admitted this week, that just 9,000 people have applied so far.

That leaves more than 80 per cent of potential claimants yet to make an application. The fund has a strict deadline for applications of 4.30pm on 18 July. No claims will be considered after that.

Mr Ellis said: "We have already received more than 9,000 forms and the volumes are increasing daily. "We do continue to urge investors to act quickly and to get their applications back to the Fund Distribution Limited as soon as possible and not to leave it until the last minute."

Many investors bought zeroes under the apprehension that they would be low-risk investments. But when the sector collapsed in 2002, many of them saw their investments almost wiped out.

After a three-year investigation, the Financial Services Authority persuaded the main fund managers and banks involved in the industry, to contribute to a compensation fund for investors. The amount investors receive will depend on how many people apply. It has been estimated that if all those who are eligible apply, investors will receive just 55p of every pound lost. However, the payouts will be greatly increased if large numbers of investors fail to apply.

The compensation fund has taken out adverts in the national press in recent weeks, in the hope of encouraging more investors to make applications.

Investors who are unsure as to whether they will qualify for the scheme can find a list of qualifying funds at www.funddistribution.org. If you think you may be eligible and have not already received an application pack, call the help-line on 0845 606 6389.

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