About 19,000 people who lost money in Lifemark bonds they bought through the collapsed investment firm Keydata are to receive compensation up to the full limit paid out by the UK's savings safety net.
The Financial Services Compensation Scheme (FSCS) said yesterday that, following an investigation, it had decided that the bonds had no value, meaning investors will not suffer deductions from their compensation. As a result, people will receive up to £48,000 in compensation, made up of 100 per cent of the first £30,000 they have lost and 90 per cent of the next £20,000.
The FSCS said it would pay compensation to these investors in September after deciding that the marketing material used by Keydata to promote the Lifemark bonds did not comply with Financial Services Authority rules. This meant Keydata had a legal liability to people who lost money because of the problems at Lifemark, which is not covered by the FSCS as it is based in Luxembourg. This liability is now being covered by the FSCS after Keydata was put into administration in June last year.