The Financial Services Compensation Scheme has issued a rare public warning about scammers targeting victims of mini-bond provider London Capital & Finance (LCF).

Some 11,000 investors lost up to £237m in total when LCF collapsed in 2019.

The FSCS says it has received reports that letters are being circulated by scammers on FSCS headed paper.

The letters encourage LCF customers to get in touch to claim compensation following the liquidation of LCF assets.

In a statement the FSCS said: “These letters are not coming from FSCS. This is a scam and LCF customers should ignore the letters.”

There have been several attempts by scammers to target LCF victims. In January 2022 the LCF administrators warned about emails sent to LCF bondholders by a suspected scam firm claiming to be LCF.

The FSCS said any concerned individuals can contact the FSCS for guidance on the authenticity of any letters.

In October 2022 the FSCS closed its compensation scheme for victims of the failed £237m mini-bond provider. The FSCS paid 99.5% of customers eligible for compensation although many did not receive full compensation due to compensation caps. 

In total £115m has been paid out through a government-backed scheme with an estimated £173m in compensation paid to LCF victims in total. The figures suggest victims have received, on average, just over 70% of the investments they lost.

In May this year the Serious Fraud Office secured a suspended 10 month prison sentence against Michael Thomson, the former CEO of London Capital & Finance (LCF).

The sentence, suspended for two years, was imposed at Southwark Crown Court because Mr Thomson was found to have breached a restraint order on use of his bank accounts.

Mr Thomson, 50, was CEO of LCF which leaving 11,000 investors with combined losses of up to £237m.