Will savers get their money back?
The Financial services compensation scheme
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In 2009, the FSCS compensated those with "Capital Protected" products (i.e. where capital security did not depend on stock market performance) from NDFA, ARC and DRL. FSCS has always resisted compensating those with Capital At Risk structured products (SCARPS), but some people with SCARPS are now getting their money back. "The fact that others with the same plans may have been compensated is immaterial. The burden of proof lies with each claimant ", according to FSCS. |
The Financial Ombudsman Service
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Some savers have made successful claims against advisers or product providers, but most are stuck in the FOS queue. Cases against Meteor are now reported to be on hold pending further review. According to Natalie Ceeney - Chief Financial Ombudsman on BBC News May 2011: "We've seen some pretty scary cases where very low risk savers were sold high risk products they never should have been sold" |
Private arrangements
Some IFAs and advisory firms have now compensated savers by private arrangement.
No certainty in Lehman liquidation
This is one of the largest insolvency proceedings of any kind in history. There is no certainty of how much will be recovered, or when. The latest Lehman update from Meteor Asset Management (Nov 2011) suggests a recovery of around 11%, but several Lehman entities are involved and amounts could vary.
FSCS makes no attempt to contact thousands who could claim
The FSCS announced in September 2010 (click to view) that FSCS had found nothing wrong with the marketing materials. A few dozen savers who presented new information to FSCS in 2011 about misrepresentations in the marketing materials have since been compensated, but FSCS has kept this quiet. FSCS has the names and addresses of 2000+ other savers with the same plans, but does not attempt to contact them. When challenged on this, FSCS says it has taken sufficient and appropriate steps to inform investors. By contrast, FSCS wrote individually to all Lehman investors with 'Capital Secure' products in 2009/10 inviting them to apply for compensation.
Will savers get their ISA allowance back?
According to an announcement by Mark Hoban, Financial Secretary to the Treasury, in December 2011, investors with Isas from NDFA, DRL, ARC or Meteor directly affected by the collapse of Lehman Brothers will get their ISA allowance reinstated to the same level of investment, irrespective of whether compensation has been paid. This is expected to be put in place during 2012. See Parliament BBC
What can affected savers do next?
Check the liquidation situation
DRL,
NDFA administration/liquidation - Grant Thornton
ARC administration/liquidation
- CBW
Meteor
Lehman Plans - Meteor
Lehman
Europe Administration - PWC
Lehman
Brothers Debtor database (Enter plan manager name)
Consider a compensation claim
Visit the Financial Services Compensation Scheme FSCS and Financial Ombudsman FOS websites for details of how to use those services.
If you believe you were misled by the product marketing materials
Mis-selling claims against NDFA, DRL and ARC may be raised with the FSCS. Claims against Meteor or other firms marketing Lehman bonds must be raised with the firm first, and then may be referred to the FOS if necessary.
If you believe your adviser got it wrong
Mis-advice complaints against UK-regulated advice firms (eg. IFA, wealth management firm, high street bank) that are still trading must first be raised with the firm concerned. You may then escalate the complaint to FOS if necessary. If a regulated advisory firm has ceased trading, the complaint will normally come under FSCS.
If you believe the fault lies with both
These are separate complaints and may be pursued in parallel.
Keep us informed
We keep track of claims progress data and experiences across the group to identify where to focus effort. Existing members should use the Claims Tracker on the Claims Progress page to keep us informed of progress.
Keep your MP involved
Many MPs thought the problem was solved when FSCS agreed in 2009 to compensate Capital Secure savers. Some victims got new MPs in the May 2010 elections and haven't yet approached them. Even if you have already got help from your MP, you need to keep them involved. See the MP Activity page for details of how your MP can help.