Claim now for split-caps compensation

VICTIMS of the split-capital investment trust scandal can claim compensation from today. Around 50,000 investors who lost money have until 18 July to claim from a £194m compensation fund, set up following a deal between the Financial Services Authority and 22 City firms on Christmas Eve.

Splits were sold from the late 1990s as 'safe' investments, carrying little risk of large losses. One offered by Aberdeen Asset Management even described itself as 'the one-year-old who lets you sleep at night'.

Although splits were sold as low-risk products they collapsed in value after the stock market plummeted in 2000. It later emerged that splits had been investing in each other, creating a so-called 'magic circle'. When one went down, they all did.

However, thousands of savers are set to miss out as a number of companies that sold splits were not involved in the FSA's agreement. BC Asset Management and BFS were estimated to have accounted for nearly £300m of the total losses incurred by investors but were not party to the December deal.

Claims forms are being sent out by Fund Distribution Limited to those hit by the scandal, which is estimated to have lost investors up to £700m.

It follows a partial victory by the FSA, which had been hoping for a £350m fund for victims and for firms to offer compensation voluntarily. Compensation claims will be judged on a case-by-case basis, with payouts expected to land on peoples' doormats in the autumn.