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Financial compensation offered to Keydata victims

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Around 19,000 consumers who lost money in Lifemark bonds bought through collapsed investment firm Keydata are set to receive compensation, it has been announced.

The Financial Services Compensation Scheme (FSCS) said following an investigation it had decided that marketing material used by Keydata to promote the Lifemark bonds did not comply with Financial Services Authority (FSA) rules.

As a result, the company has a legal liability to people who lost money due to the problems at Lifemark.

But investors will not find out how much compensation they will receive until the end of October.

Luxembourg-based Lifemark is in provisional administration, but the administrator is considering proposals to restructure the group. The FSCS said there was still uncertainty about the restructuring and what the implications would be for investors.

As a result, it is not known how much individual Lifemark bonds are worth, and how much each investor has lost.

Lifemark itself is not covered by the FSCS because it is based out of jurisdiction in Luxembourg, but the FSCS will be paying out compensation to eligible UK investors who bought bonds through Keydata, if it finds the group has a liability to them.

Keydata was put into administration in June last year, which is why the FSCS has stepped in to pay redress. The group is being investigated by the Serious Fraud Office.

The announcement affects people with Lifemark Defined Income Plans issues one to eight, Income Plans issues one to 14, Secure Income Bonds issue four, and Secure Income Plans one to 14.


Written by Andrew Hodges

October 5, 2010 at 2:32 pm

Posted in Comment, LinkedIn

Tagged with ,

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