IFA outraged at ‘irresponsible' FSCS Keydata list error

A Poole-based IFA has expressed anger at lawyers for the FSCS for apparently mistakenly including the name of his firm on a list of businesses the scheme may pursue for money it paid out to Keydata investors.

Chris Paul, director at PFM Associates, was one of 537 firms who yesterday received the particulars of claim documents from Herbert Smith, the law firm hired by the FSCS, which included the names and addresses of all companies linked to sales of SLS-backed Keydata products.

The document also detailed the names of investors in the products, which firm they dealt with, and how much they invested.

Paul said he was shocked to receive the package and find his name on the list as he had never recommended a Keydata product.

He realised the person to whom his firm had supposedly invested in Keydata was a client of an adviser who joined the firm briefly, but who had made the Keydata recommendation while at his previous firm.

"The firm for whom he worked when he sold the product is not on the list. It is totally irresponsible," he said.

Paul contacted the FSCS and Herbert Smith to complain.

In an email reply to Paul, Herbert Smith said: "We are still investigating the position but, for the reasons set out in your email, it appears that your firm's name may have been included in the claim form and particulars of claim in error. We will confirm the position on Monday.

"To the extent that an error has been made, we regret any inconvenience caused and will take steps to remove your firm's name from the Claim Form and other documents."

The FSCS has failed to respond to Paul's complaint.

However in a statement in response to questions from IFAonline, a spokesperson for the body said: "The FSCS pursues recoveries whenever practical and cost-effective to do so.

"We believe claims may exist against a large number of firms for compensation costs relating to certain Keydata Investment Services Ltd products.

"As a result, and in order to protect against the possible expiration of the limitation period, we have issued legal proceedings against a large number of firms who sold SLS-related products.

"We have served those firms with FSCS's claim form and the particulars of claim, which sets out the details of FSCS's potential claim, and requested a stay to allow the FSCS to engage directly with the firms in respect of its claim. We cannot comment further at this stage."