Compensation

If you lose money through the fraud or negligence of an investment business and the company has gone bust, you may be able to get compensation through one of the schemes which apply to investments.

The SIB compensation scheme covers the first £60,000 of your investment in full and 90 per cent of the next £40,000 - giving maximum compensation of £48,000. If you think you have a claim against this scheme, contact the SIB ).

Insurance-linked investments are covered by the older Policyholders' Protection Act scheme. This covers 90 per cent of your claim against the company with no upper limit at all. If you think you have a claim against this scheme, contact:

Policyholders' Protection Board

Claims against banks, other than those covered by the Financial Services Act, may be covered by the compensation scheme set up under the Banking Act 1987. This covers up to 75 per cent of the first £40,000 of your deposits - maximum compensation of £45,000. If you think you have a claim against this scheme, contact:

Deposit Protection Board

Claims against authorised building societies, other than those covered by the Financial Services Act, may be covered by the compensation scheme set up under the Building Societies Act 1986. This covers up to 90 per cent of the first £40,000 of your investment - maximum compensation of £48,000. If you think you have a claim against this scheme, contact:

Building Societies Investor Protection Board

Some professions, such as solicitors and accountants, are covered by their own compensation schemes, as well as requiring members to have Professional Indemnity (P) insurance which should ensure that the member is able to compensate you if you lost money through the firm's negligence or fraud.

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Going To Court

If you lose money because of the actions of an investment company or adviser, you could take them to court - for example, you might be able to sue them for negligence or misrepresentation. If Financial Services Act rules have been breached, you could bring a case under section 62 of the Act. But taking a financial institution through the courts would be a lengthy and, in most cases, costly exercise. You'd be wise to consider it only as a last resort after you've used other available complaints procedures. If you have a choice between going to court or giving up that right and using an arbitration... see: Going To Court


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