Red tape puts off 'splits' complaints

ONLY a third of the 50,000 individual investors left out of the pocket in the £144m split-capital investment trusts scandal have put in compensation claims because the process is too intimidating and bureaucratic, a senior MP has claimed.

John McFall, chairman of the House of Commons Treasury Select Committee which helped unmask the scale of the scandal, says he believes the body set up by the Financial Services Authority to deal with the claims is not doing its job properly.

'I have been alarmed to receive complaints in recent weeks that investors were encountering a mixture of intimidating claims forms and an excessively bureaucratic approach by the scheme's administrators, Fund Distribution Ltd,' McFall says in a letter to the Financial Times today. 'Taken together, these problems risk undermining the success of whole scheme.'

Fund Distribution was launched at the turn of the year to distribute compensation to investors after the investment trust companies caught up in the splits fiasco settled with the FSA. However, just a fortnight before the 18 July deadline, only 17,000 investors have lodged claims.

McFall said he has had assurances from Mike Ellis, the former senior Halifax-Bank of Scotland executive running Fund Distribution, that claims will not be rejected if forms are filled in incorrectly and that all claimants should have access to technical experts to help with their claims.

INVESTMENT clubs have been barred from claiming compensation for split-cap mis-selling, according to a report in the Financial Times at the weekend.