FSCS Reviews 700K Phone Calls in Connection to LCF’s Scandal

The UK Financial Services Compensation Scheme today has published un update on its website which explains the unique challenges it faces to handle compensation to investors who relied on claims for misleading advice in London Capital & Finance.

To kickstart this process, the FSCS reviewed almost a million pieces of evidence in order to determine which customers had been given misleading advice by LCF. It has also gained access to an additional 100,000 emails held within LCF’s email server, which extended the time frame to complete the process beyond the original deadline.

The lifeboat fund further states that a large proportion of the evidence they needed to review was telephone calls. For this purpose, they doubled the head count of their specialist team and worked with a company called Capita to create an Artificial Intelligence (AI) Artificial Intelligence (AI) Artificial Intelligence (AI) is a term coined by in 1956, which defines the automation of robotics to the actual process of robotics.The evolution of technology has since led to the gradual adoption of AI in several aspects of our lives. One of the most pertinent is its impact in the financial services industry, which provides a wide range of possibilities moving forward.Ways AI Can Transform FinanceAI has the potential to transform the financial services industry forever. This can take shape in Artificial Intelligence (AI) is a term coined by in 1956, which defines the automation of robotics to the actual process of robotics.The evolution of technology has since led to the gradual adoption of AI in several aspects of our lives. One of the most pertinent is its impact in the financial services industry, which provides a wide range of possibilities moving forward.Ways AI Can Transform FinanceAI has the potential to transform the financial services industry forever. This can take shape in Read this Term) solution to help them review 700,000 phone recordings.

Without the use of AI, the FSCS estimates that it would not be able to start paying claims until January 2021, or to complete this work before 2022. To date, the scheme paid out more than £38.1m in compensation to LCF customers.

According to the FSCS’s forecast, it expects to pay up to £44 million to cover estimated compensation costs for investors who bought the unregulated investment products in the hope of high returns.

“Once we had reviewed all the evidence and carefully mapped each of the pieces of evidence against each individual's claim, we set up a specialist team specifically to manually review and assess each LCF advice claim on a case-by-case basis. Due to the sheer volume of evidence that needed to be reviewed for each claim, in August of this year, we increased the size of this specialist team by nearly 80%,” the commission said.

A Marketing Marketing Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Read this Term Company behind the Scandal

Part of FSCS’s ongoing probes involve Surge Financial Ltd, an online marketing firm that was reportedly paid nearly $60 million to promote LCF’s unregulated mini-bonds. While LCF was authorised by the FCA, its mini-bonds are not regulated and therefore customers were not covered by FSCS’s plan, meaning their investments could be wiped out unless they can show they bought the bonds following bad advice.

Around 12,000 investors suffered major losses following the £236 million collapse of the mini-bond issuer in 2019. However, a small number of LCF received compensations so far while the vast majority of the bondholders are still waiting to hear if they have any chance of getting their money back.

Some claimants are fighting for eligibility of compensation and asked the court to scrap the decision that considered LCF bonds issued after January 3, 2018 was not a regulated activity.

The affected bondholders say they bought ‘mini-bonds’ from London Capital & Finance only after receiving assurance from the FSCS that their money was covered by the UK’s compensation scheme. As such, the FSCS is accused of giving misleading information over the protection they should expect.