Arch cru redress scheme could 'irreparably' damage industry

A proposed £110m redress scheme for Arch cru investors could "irreparably" damage firms forced to pay for the failures of others through the Financial Services Compensation Scheme (FSCS), the regulator has been warned.

Currently being consulted on the by the Financial Services Authority (FSA), the scheme would require 795 firms to review their Arch cru business and, where any mis-selling is identified, to pay redress. Although Informed Choice did not sell the products, which it deemed to be too opaque, the firm responded to the consultation because of its fears about the potential impact on the intermediary sector. In an open letter to the FSA, executive director Nick Bamford suggested the estimate of 30% of firms failing as a result of the scheme, potentially landing FSCS levy-payers with a £33m bi...