Two years on from Lehman, structured product pain continues

At 75 and 84 the loss of income from the £30,000 we invested in CAR products from NDFA is biting in many ways, one of the most significant being our inability to maintain our house, our greatest asset, as we can no longer tackle DIY.

It is pretty disgraceful that our financial authorities have taken two years so far and will still not let Lehman savers know where they stand. The number of current MPs actively supporting this cause is at least 70 according to members of the Lehman Savers' action group (Spirit). Many of these MPs are now in front bench positions and unable to sign Dan Rogerson's back bench EDM but they have been taking direct action at ministerial levels and with FSCS to try to get this resolved. FSCS continues to say it is complicated.

Investors in third party funds that then themselves re-invested into Lehman structured products were always likely to receive some, if not full, compensation although certainly a loss of interest. This because the investors believed the literature issued by the third party and relied on them - and may themselves never even have heard of Lehman. However direct 'Investment' into Lehmans 'Capital at Risk' product solely relies on Lehmans who later went into administration. These so called investments offered a higher potential return but as in the title says the CAPITAL WAS AT RISK. There should be no question of compensation for investors in these circumstances. A higher promised return than anywhere else is always a higher risk of loss and being on notice that the Capital itself was at risk says it all. Hard luck!

Having invested funds on NDFA recmmendation which were from the remains of the sale of my home, so as to supplement my pension, I have not had any income from that investment. I would never have invested in a USA bank had I known, that that was where my money was going, because of what was happening in USA at that time, but Lehmans were never revealed in the Plan paperwork. All that was in the Plan spec was that my Capital was at Risk if either or both of the FTSE100 & Eurostoxx 50 by 50% over the 5 years of its life. The Plan stated that the investment destination was considered strong and had at least an A+ plus rating. Of course I didn't know Lehmans were involved, so even if I had known about Moodys' downgrade warning on 17th March 2008 or S&P's downgrade warning on 21st March 2008, or the warnings of Lehmans expected shareprice falls, it would have had no impact on me. Despite the S&P warnings, which were the source of the stated A+ assurance measure my funds were transferred 3 days later, totally unknown to me, to Lehmans. I now live with my daughter and have my widow's pension, but no extra income from my investment, and I may have lost my money. I am 92 years of age and registered blind. I have had 2 years of worry and I am still waiting to know my financial future. I wonder if I will live long enough to see all or any of my money back. My MP has supported my case, but FSCS still just says its complicated and I will have to wait for its decision. Then what, if it goes against me, and other investors- will we have to sue? My personal opinion is that we have had shabby treatment and it is very upsetting.

In response to Peter Tinslay, the five remaining Lehman-backed products that the FSCS are considering are indeed third-party products, none of these retail savers invested directly with Lehmans. The FSA's own published definition of 'Capital At Risk' at the time these products were sold related entirely to the stockmarket index risk, with no mention of counterparty risk at all. The product brochures were almost equally flawed. That's the point: the single biggest vulnerability (counterparty risk) was not explained to unsuspecting retail investors.

Well said Londoner!

There were a great many defects in the marketing and etc of the Plans as stated by FSA in its report. How can an investor make a valid judgment when a vital aspect is omitted from the Plan details? The omission(s) was/were a significant factor in the mis-leading of actual and potential investors.

In response to Anthony Tinslay's comments, Capital At Risk certainly does not "say it all". As other people have pointed out, savers believed they were taking a calculated risk, linked to the stock market index, not risking all their money on the health of some unnamed foreign bank.

We compared the Capital Secure with the Capital at Risk product and could see that the only difference was that the Capital Secure people would get their money back even if the stock market dropped to Zero, whereas the CAR people would lose all their money in these circumstances.

The Capital Secure people have been compensated, not told they should have looked beyond what the brochure said, but the CAR people, who did carefully consider the risk to the capital as presented in the brochure in a clearly laid out table, are now expected (according to Mr Tinslay) to retrospectively have been prepared to take another much more serious risk: a total gamble on the solvency of an unnamed bank.

It is like being told your life is at risk if you cross this road, and it explains all about the speed and frequency of the cars and fails to mention there is also a bomb on the road. Yes, you will take the risk of the cars, but not the bomb!

In answer to anthony tinslay. None of the plans in question were sold as direct investments in Lehmans. There was no mention of any third party involvement at all in any literature used to sell these plans. My own plan was sold as "capital at risk" the statement from NDFA at the time of selling me this plan was " you will only lose capital if either of

the stock markets fall by more than 50%" This has not happened and yet i have lost all my money. I think i was totally misled by the literature used to sell these plans.

I have to say i am staggered by the incompetence and bluster from the FSCS on this subject, those of us who were clearly 'conned' out of money (and yes i do use that word as it is as much as a con as the fraudster who nicks your grannies savings) have had no support nor consideration from the FSCS for 2 years now

I invested in a plan linked to the FTSE and yes i knew that my money was 'at risk'...but it was only ever at risk if the stock market fell by more than 50%...

the bank that underwrote my investment was not mentioned nor did any documentation suggest that my money would be stolen if the bank went bust!! and stolen it was as Lehmans transferred all assets to the USA the day before they were closed down....

the FSCS was put in place to make sure things like this did not affect all the people like me who have lost their life savings...the FSCS instead hide behind ridiculous statements and ignore all correspondence...this is shameful and im shocked that Gordon Brown had the nerve to say that no investor had lost out due to the collapse of Lehmans.....

well i have and the FSCS have done nothing to help me whatsoever....

I have written countless emails and letters to the FSA, the FSCS and im still at square 1...

I strongly suspect that the FSCS are taking so long because they are studying all of the legalities around telling us we will not be compensated knowing this will result in numerous legal actions from us, i hope and pray not but why have they taken so long.

All of us who were conned out of our money will continue our fight until we receive our money back.

I am somewhat at a loss to understand how the FSCS can delay so long on cases which have been passed on by the Ombudsman. At my age I cannot afford to wait too long for the FSCS to make a decision. My contacts with the FSCS have been unsatisfactorily vague and bordered on the rude. A most disgraceful affair bearing in mind the clear indication of sharp practice.

I had an income plan from NDFA, recommended by SAGA, under the same terms as one of the plans under discussion. It ran to term and I got my money back, along with a letter asking if I would like to invest in another of the same, sent by NDF Administration. The Terms and Conditions were as stated by White Stick Follower and Patricia Ryan. There was no mention of Lehmans. I said Yes, and a month later my money was gone. As far as I am concerned, the investment was Capital Not At Risk (except for the Stock Market Performance relationship), and should be treated as such.

Like many others ,my money was invested through NDF and their literature clearly states that capital is ONLY at risk if the index drops 50% and then only on a sliding scale for capital return. Nowhere was any mention made of where the money would be invested. Who would have thought that a world sized bank like Lehmans go bust, apart from all the appropriate regulatory bodies that should have been looking out for our interests instead of covering up for their own ineffectiveness. The bottom line is we have all been badly treated by not only the FSCS but by the whole (LESS THAN HONEST) financial industry. Time for redress! S o if one of the FSCS spotters is reading this comment, go tell your tax payer funded bosses to do the decent thing and give us our money back as i feel that ive been robbed.

As per Toni Reynaud, my first investment was recommended by an IFA and ran to term, whilst providing extra income for my late husband & I. As a result I trusted NDFA. NDFA wrote to me suggesting that I rolled over my fund into the new Feb 08 Plan, and said in a letter that it considered the Plan suitable for my needs. NDFA kept my money for the duration of the maturity of the first fund until the investment of the second. I was prepared to take the highlighted risks (i.e. Stock Market) in the interests of income. When the S&P and the earlier Moodys were, as I have recently found out, flagged up in the Financial media NDFA should have read it and been alerted. I think NDFA should have withdrawn the Plan(s) as it could no longer be said that, as they then knew, or ought to have known, but investors didn't, where they were placing the money could no longer be called 'strong' and the loss of the A+ warning, should have caused NDFA to hold off. I believe that the funds moved no longer fitted the criteria stated in NDFA's T'& C's. I have also noted that in those T's & C's that in answer to the question 'Who is the Plan Manager?' NDFA stated the Plan is ISSUED by NDF Administration Ltd. Elsewhere NDFA says that the ISSUER of the Securities is considered strong. Using the word Issuer & Issued in what now appears to have differing meanings was misleading, in my opinion. When is an Issuer an Issuer- or not ? Very confusing. If I did not have family help and support I would be in a dreadful mess and would not be able to cope on my own.

White Stick follower, I hope I am as switched-on as you are, if, and when I reach 92. You have put the case most succinctly.

The FSCS has been hiding coyly behind the complexity skirt for far too long. I think it is time we were treated as grownups

I was also a client of NDF Administration who sent me an 'exciting Investment Opportunity' when a previous bond matured in April 2008. The literature which they sent was quite specific regarding the risk to my capital stating the ONLY risk was if the stock market fell by more than 50%. There was NO mention of Lehman or third party risk. Money for this investment had built up in Peps during the final years of my teaching career with the intention of producing a tax free income. Not only have I lost my capital but also the ISA element of my savings. I feel the FSCS have been slow and very unsympathtic to our plight.

So Anthony Tinslay thinks there should be no question of compensation for victims of capital at risk products backed by Lehmans. I agree that these products were labelled as 'CAR' but the brochures and other literature were exclusively devoted, at great length to explaining that the nature of this risk was due to the FTSE100 or Eurostoxx50 indeces falling by more than 50%. Only one small paragraph under Risks mentioned the possibility of a counter-party failing to meet its obligations which might result in a delay in payments [not return of capital]. This is blatant mis-selling

It seems clear to me, from the substantial correspondence on this subject over 2 years, that had the FTSE dropped substantially and investors had failed to get back their full capital they would have been disappointed, perhaps even distraught, but not surprised. This is because the consequences of this event were clearly explained in the marketing literature. However, the fact that an unnamed foreign bank going bankrupt has resulted in the potential loss of investors' total capital quite clearly came as a total surprise and shock to the vast majority of investors. The fact of that widespread surprise is evidence enough that the marketing of this product was flawed.

My wife, who is now 70, invested £7000 as an ISA, in the NDFA Fixed Income Plan June 08, as a follow-on investment. The invitation letter to invest from NDFA clearly stated the a full return of capital would be made if the FTSE 100 or Euroxx 50 stock market indexes did not fall by more than 50%. Following the guidelines in the FSA Capital at Risk brochure it appeared that this was a very low risk investment, and we were prepared to accept the stock market related risk. Had we known that the investment was dependent on the fortunes of an American bank which was widely known to be in financial difficulties for several months before the investment was made, we would not have proceeded. It came as a complete shock to hear from NDFA in September 2008 that Lehman Brothers were involved. Our money did not go to Lehmans until August 2008, and I believe NDFA could have, and should have, prevented this. My wife's case was with the Financial Ombudsman and has been passed to the FSCS. I am concerned that the FSCS decision will be determined by budgetary constaints rather than the justice of the case. I think the FSCS should compensate us NOW for the loss of income, and return our capital in 2013 if the indexes have not then fallen by more that 50%.

Belinda Platt,

I am officially blind, with a modicum of vison, and I am deaf without my hearing aid, but I do follow the news closely on TV and I knew about the collapse of the House of Cards in USA. So I wouldn't have touched any US investment with a barge pole. Yes I am switched on, but I have too admit that I would not have known about the unaaceptable behaviour surrounding this matter without the kind assistance of a relative, who has been working like a Trojan, digging lots of, what is now, disturbing news and who types my inputs to this dialogue. I can't use a computer, they appeared far too late in my life.I chose 'White Stick', because I have one and 'Follower' because I followed, trustingly, some people who did not see or chose to ignore what was staring them in the face.

I agree with all of the things that have already been said, I wonder how Mr Tinsley would feel if he was in the situation we all find ourselves in as far as CAR products none of us knew we could lose all our money as stated we thought it was dependent on the FTSE100 and DOW JONESEUROSTOXX50.

I queried the product with my IFA when the rating was downgraded, this was before I was committed but was re-assured it was still a good investment, without the assurance I would not have gone ahead, after all they are supposed to be the "EXPERTS".

With the misleading literatue of NDFA and advice from IFA which was totally unsuitable, I feel we have all been let down very badly.

I can only agree with all the recent comments and I guess the day of jugement is nigh. I think the point to bear in mind is that the only areas that NDFA ever used to defend their possition were "there was a risk that the issuer might be unable to meet its financial obligations" and " the securities might result in payments being delayed, reduced or even terminated".

These words were taken out of context and refer to the interest payments. Had they ment to include the capital then the word "repayment" would have to be included.

It is therefore clear that they themselves either did not understand that there was a possibility of default in this manor or they had an undying belief that no bank of this size would ever be allowed to fail.

In addition most of us have have literature which states that capital was ONLY at risk if either index fell by more than 50%. Firstly, the definition of "only" in the english dictionary is " no other", a clear case of mis-selling.

Secondly for those people who say we should have known that we could loose all our money because the Indexes could never reach Zero, well they only have to look at the tables on page 5 of the brouchure supplied by NDFA. Here you see that this situation was the only way we could loose capital, even then we would still get the interest, another clear case of mis-selling.

Let us hope common sense prevailes rather than over complicate the process

My relative has pointed out to me that the Treasury Minister said in the House on 7th July 2009, that FSA was, amongst its scrutiny of NDFA advertising and marketing, looking at whether NDFA alerted investors in the face of the Lehmans downgrade [ and one might think the warnings that preceeded the downgrade]. The answer is, in my opinion, that NDFA failed in its duty of care to investors by not warning of the risk, and worse still it continued pumping more and more of investors money into Lehmans.

If NDFA had warned investors then NDFA would have had to disclose where investors money had gone, and according to media reports NDFA said that Lehmans did not want its involvement disclosed.

I suppose this is one of the 'very complicated' issues with which FSCS has grappled. Or to put it another way, how can we get out of paying out!

Sought advice from an IFA after scrimping and saving with my partner. wanted to invest £15000. I did not want to dabble any more in shares because at the time I thought they were too risky. He suggested kick out performance plan from DRL backed by Lehmans. We were convinced that the only risk to our money would be if the FTSE 100 index were to fall by 50% or more. We were also convinced that should anything go wrong we were covered by the FSCS compensation scheme.He also told us that this product was so good that he had the same.He gave us a brochure from barclays[structured product] never received one from DRL. Our case has now been upheld by the FOS,although now waiting for an ombudsman as the IFA did not agree with the decsion.

The FSA needs to understand most people are not financially sophiscated and rely on professional advice,not selling products to line their own pockets. I will never trust these people again.

So the sad Anthony Tinsley writes elsewhere about people going in with their eyes open. I would love to have done then & now, Being blind makes it difficult.

Even so as many, sighted people have pointed out, it doesn't matter how hard you look,even with the biggest magnifying glass in the world, there is no mention anywhere in the NDFA February 08 Plan of Lehmans. Why?Because it suited the marketers to conceal it it appears. Tinsley should read the 07,07,09 EDM report in Hansard, where the Financial Secretary said" ..at all times firms must comply with their high-level duty to ensure that promotions are fair, clear and not misleading." and later "In cases where firms have to identify explicitly a third party guarantee, the information about the guarantee must include sufficient detail about the guarantor and the guarantee to enable the retail client to make a fair assessment". That is exactly what the EU & UK law says. Again I point out that this has been read to me by my relative.

Twenty years ago I was encouraged by government warnings that my predicted pension would be insufficient to meet my needs later in retirement .

I took advice and invested the maximum monthly amount that I was allowed into then what was deemed a rock solid pension organisation called "EQUITABLE LIFE" ten years later, despite being monitored by a government Quango, "EQUITABLE " went bust then after ten years with both governments admitting that they were at fault still nothing, they are an incompetent bunch ..... Mind you some of them got their duck islands and video`s while they pondered and pondered and . . . . . .pond...z z z z z z

However, like the mug that I am, I decided that would invest any future money that I could save into ISAs , which were maturing nicely untill , yes you`ve guessed it , my IFA including many other IFA`s advised us to transfer the ISAs to ARC INVESTMENTS .

Now who`s sorting out the busted ARC organisation ?, WOW, it`s the very same Quango that is still sorting out EQUITABLE LIFE will ARC take another eight years ? Who cares ? not the quango , why should they ,? certainly not while the government hops from one leg to another trying to look good.

F. Vincent

Whilst the FOS and FSCS investigate, these very simple questions are all that is necessary:

1. Where does it mention in ANY document provided (marketing or policy) that funds were to be invested with Lehmans?

2. How do we KNOW that funds were invested with Lehmans, as they are not party to the contract?

3. Why do the FSCS and FOS require months and years to read and understand documents that had previously been approved by them, when the public get just 14 days cooling off period to cancel any plan that they have been 'sold'.

mt tindsley just doesnt get it or understand so he just shut up rather than post inflammatory comments on a subject he is ignorant of

Congratulations to the highly paid and no doubt completely impartial "experts" who have taken nearly a year to decide that the Lehmans SCARPS victims have no claim for compensation, this is despite the all important product literature having no metion of capital risk if the counterparty defaulted, in fact the counterparty wasn't even metioned. I want to know from these "experts" exactly which element of the product brochures explained the impact to potential investors that "capital is at risk if the counterparty fails"! because i can find it!!

This stinks and the fact that this announcement has been made 2 days after all Keydata investors were offered compensation makes it pretty obvious to me that this decision has been based on how much the FSCS want to pay out not whether ordinary investors should be treated fairly. The FSA force NDFA,ARC,DRL into admin due to their inadequate product brochures and the FSCS fail to back this up, a complete and utter shambles.

As above, how can one see a warning about the underlying risks related to an American Bank when it is not there?

In NDFA & etc as far as I know there were no large corporate investors. I wonder if that was a factor?

Two years to get to the WRONG descision -see http://www.fscs.org.uk/news/2010/september/ndf-drl-arc-update/index.html

Misleading marketing literature, False promioses, No Lehmans mention -so how can there have been 'adequate counterparty warnings' in the NDFA bumf. This is a scandal and a disgrace.

If the risks was so 'adequate' as FSCS seems to have concluded, one might wonder why it took professionals such an extraordinary length of time to decide that they were 'adequate'. Could it be that they were scratching around desparately trying to identify them?

No person using the laws of common sense could conclude in the same way as the fscs that there were 'adequate counterparty warnings' in the brochure. As Lehmans was not mentioned by name (in the NDFA Feb08 literature) how could a reasonable judgement be made as to the viability of the counter party? Fact is the bumf said the ONLY risk to capital was that posed by the Stock index, and even then Income payments would continue. Where to next?

Those people who chose the NDF income producing plan, rather than the similarly worded growth plan, were probably the more cautious of the investors, who needed the income. I suspect that none of the investors took much notice of the obscure counterparty risk. I think it is grossly unfair for the FSCS to compensate one set of investors completely and to leave the other set of investors with nothing.

outrageous!!!!!!!!!!!!!!!!!!!!!

but the fight continues, i just dont know were or who with yet, but im not surprised by this decision..it was just taking to long and i was deeply suspicious of the timescales

It has taken the FSCS 2years to come up with this decision what a shambolic situation, absolutely devasted. Were they waiting for Keydata decision, certainly seems that way, how do we differ from the other NDFA Capital Secure products, when you tell your IFA that you dont want to risk losing your capital and you are recommended the product we were how can that be justified .Where do we go from here?

Can someone explain why the decision for CAR products took so long when Capital Secur products and keydata took just over one year

Just to be told there is no money disgraceful.

For the FSCS to conclude matters with such simplistic reasoning begs the question why has it taken 2 years? One can only conclude that this descision was marginal and finely balanced - Victims should be given access to all the paperwork and reasoning with which the faceless FSCS based their ridiculous finding. Like East Anglia I wonder how to proceed and where to next is tricky. How are FSCS descisions challenged on a group basis - note they dont mind getting individual submissions- (divide and conquer?) Would a suitable (reputable?) law firm take up the case on behalf of victims on a no win no fee basis?

Well the Keydata lawyers, who normally represent firms complained of, would now appear to be no longer required. Perhaps the 'Spirited away' group's leaders might like to see if they will take on the victims as clienst in a group action against FSCS on the same deal? No win No Fee, but 10% of the yield if they do win is what was reported in the media.

Not that FSCS will be bothered as they are only spending tax payers money and may well be abolished before long in any event. As full disclosure is required in civil actions, the FSCS papers should be interesting- but then, of course, papers in Government departments do get lost sometimes- don't they?.

Note. An application for a Judicial Review must be lodged within 3 months of the decision. If not, it will be ruled as 'out of time'. FSCS might contrive to delay the distribution of forms to those who choose to complain, and/or FSCS might take too long to consider responses, so as to escape a JR. Those who have a complaint would be wise to move quickly. It could be argued that the 3 months should start from when FSCS makes a decision on individual cases, or from the date of the publication of its decision, This could have the effect of fragmenting claimants varying time-scales and adversely impact on any group action.

In matters of Tort, or actions for breach of the duty of care,trust & similar complaints, these must be launched within 3 years of the incident complained of. That would relate, I imagine to the performance of the "high level duties" of plan managers to "ensure promotions are fair,clear and not misleading". (q.v. Hansard- Fin'l. Secretary's statement EDM 7/7/09.

I have had the benefit of the 'unofficial' opinion of an experienced solicitor and a Judge who sits in the Civil Division and this gives me strong grounds to believe that the victims would win a civil action, based on ostensibly inconsistent FSCS decisions and allegedly misleading advertsing & marketing of Plans, as has been widely complained of here and elsewhere.

Notice they did not use the words "Fair, clear and not misleading" in their statement only "adequate and appropriate", I wonder why, may be their legal minds would not let them. There is no statement in any of the literature I have which mention failure to "repay" the original capital which they say they have. Surely these professionals should after two years be able to state clause by clause how they came to this conclusion

Some help is required to choose the best for of approach.

They are offering no help and hoping that we all going to make a mess of our application so they can claim some success

Hopefully someone with a professional background and knowledge of our situation could advise us how to get the ball rolling

we have to now appoint legal representation and go after the FSCS there is no other way, they have failed appallingly

Has anyone read this link, note the dates and the outlooks

http://www2.standardandpoors.com/spf/pdf/fixedincome/Lehman_Brothers.pdf

Could you check to address please? My PC can't find it.

Try typing into Google

Why was Lehman Brothers rated 'A'?

it should come up first

If anyone cannot find this link it is a report on why Lehmans were downgraded written by Standard & Poor.

On page 4 it states that "on 21 march 2008 we revised our outlook on Lehman Brothers to Negative from stable" . Later it states "on june 2, 2008 we lowered our rating on Lehman Brothers (holding company to 'A/Negative/A-1'). They also assigned a negative outlook to the lower rating and stated it could be lowered further.

If this is correct then the statement made in the June income plan that on 3rd. June it had a rating of A+ and remained strong is shear fabrication, compounded further by NDFA letter 14th july where they reiterated the "Strong" Statement.

People who understand these things better than me please make comments because if this is corrected then it opens a whole new can of worms

To BobR, yes that particular brochure had the credit rating listed incorrectly. The other NDF CAR plan was closed for applications in Feb, the ARC brochures said 'at least A' and DRL brochures said 'A+ at the time of publication' (without printing a publication date)

Perhaps more important was the direction of travel. If we had known that the outlook had been revised downwards three months earlier, and that the rating had actually fallen in June,(and if we had understood counterparty risk) this would have rung alarm bells.

I'm guessing, but as far as these ratings are concerned, we could argue that the product providers had a duty of care to (1) tell us about the Feb change in outlook; (2) warn investors about the change in actual rating before accepting their cheques; (3) explain clearly how the rating system works (ie what the scale is).

If anyone has lost their plan marketing brochure, you will find links to them at www.missoldinvestments.co.uk

I received a letter from my IFA on the 5th August 2008 informing me that there had been a change to the Standard and Poor!s rating .He said the alteration was announced after the brochures were printed, if this was downgraded earlier, why were we not told.

I queried this with my IFA this was before I was comitted, he assured me this was still a very good investment., without this assurance I would not have gone ahead. I will never trust them again. I feel they all sold us something they did not know enough about. "Easy money at that time for them"

As the Counter party info was down played and hidden away in the terms and conditions I guess that most (like me) relied upon the bold brochure text re 'the only way you will lose captial is if the index falls by 50% blah blah). However - as the CP was not named, and the info we were given was that the cp had a rating of A+ and was considered 'strong' (whatever that means) then if any savers went looking for this detail and trawled for A+ firms capable of being a CP then Lehmans would not have even revealed themselves. That the CP was not named and this vital info deliberately kept from savers is surely not 'fair' is def 'misleading' too. For the FSCS to now say we were 'adequately' warned is nonsense. If vital facts were withheld how can we have been faily warned? I think a good brief would drive a london bus through the FSCS descision, its nonsense.

My investment was originally with NDFA was with Abbey National being the named Counter Party. The plan performed according to the literature. at maturity NDFA wrote and offered to reinvest the funds into the Feb 08 plan, they did not carry out any FSA risk assessment requirement when taking any new investment/insurance etc (this is a breach of their rules). The contract does mention Lehmans. We only have the administrators word that funds were invested with Lehmans, they are not named in any capacity to any contract.

The FSA report on SCARPS said that it expected the counterparty to be named [not concealed] so that investors could make an informed judgement of risk. It also stated that where there is a guarantor within the same group that should be made clear, as the risk of failure of the group would negate the guarantee.

The EU regulations, incorporated into UK law in 2000, make it clear that promotions must be fair clear and open so that investors may make informed judgements as to risk. Both of the above notes are a synopsis and inevitably are paraphrased..

As regards the A+ rating, and the S&P announcement on 21st March 2008 and as far as my money was concerned NDFA still held it as part of its recommended roll-over proposal. Despite warnings in the financial industry NDFA paid my money away to Lehmans in late May 08 some 6+ weeks later. I now know that Moody's had issued a similar downgrade notice on 17th March 2008 and CNBC reported on the same date that it expected Lehman's share value to fall by 50% over the next few months. I am of the view , and it is reinforced by a very expereienced lawyer and a Judge, in the Civil Division, albeit expressed pro bono as a friend, that there is a sound argument on the basis for a civil claim in matters of failure of duty of care, and/or negligence, and/or breach of contarct, and of trust. Thus the elusive civil liability sought by FSCS's lawyers seems clear to all except those who choose not to see it. Once again the above is the product of the work done by by relative on my behalf and I am extremely grateful. The Treasury Minister wrote to my daughter's, and my, MP and said that NDFA went into administration following direct action by FSA because of advice failings and deficiencies in marketing literature in the marketplace. Surely this must also produce a civil liability?

Given all of the above it is difficult to understand the FSCS decision.

It seems to me that the fight must go on!

Unless John Bristow has a different print of the 'NDFA Fixed Income and Growth Plan February 08' I assume that he must have mis-typed. There is no mention of Lehman's anywhere in my copy.

From all the above it is now clear that the door is now wide open for us to claim compensation from the FSCS on not only misleading statments on Capital at risk ( which may come down to a legal reveiw) but also on the stronger issue of NDFA saying that the Counter party ability to pay was "strong" when the rating agency they quoted had down graded from them from stable (which is lower than strong) to negative some months earlier.

It is now also becoming clear why NDFA did not name the Counter pary, Lehmans needed every penny (cents) to try and head off collapse and had to truth be released then no one would invest.

I did actually try and find the which counter party they were using buy tracking A+ to A moves in july when we were informed of the change (over 1 month after the date ) but working from the date of 3rd June we were given Lehmans did not show up.

May be we can use the freedom of information act to extract from the FSCS the thinking behind their protracted pontifications.

My bad, I left out a word. NO where in any documentation does it mention Lehman, therefore we do not know if in fact the money was invested there or not. Sorry for any confusion.

Note to the External Advisors Employed by the FSCS

I hope that you can sleep easy after taking many months to undertake the detailed review of the complex issues to come up with your answers.

It could be your family who have been led in ever decreasing circles and lost your family cash, but don’t worry I have some good advice for you don’t trust any of the Financial Institutions. Put your cash under your bed I hope the rustle of the notes doesn’t keep you awake too much.

Like White Stick my NDFA 'investment' was in the Feb 08 plan and was a 'roll over' from a maturing NDFA 5 year plan which had perpormed as promised.This product was originally sold to me through an IFA in 2003, but in 08 NDFA wrote to me directly ,missing out the IFA, and pitched in simplistic terms the benefits of reinvesting in a new plan. I phoned NDFA at the time -and was told that 'the only way you will lose capital is if the index falls by 50%, and if that happens the world will collapse" !!! and 'you also have the FSCS compensation scheme if anything happened untoward"!! also that the new investment was 'the same as the last one". After sept 08 when we were told our money was lost I phoned NDFA again to complain - they said the reason Lehmans was not in any literature was that it would cost too much on printing! Like BobR above I think his theory is closer to the mark. The more 'brain power' we throw at this the more will be revealed, the FSCS should be made to produce their reasoning and legal arguments for denying us compensation.

It is fair to say that lawyers can always be found to give the opinion that the client wants.

When the client loses the case, such lawyers say the Judge must be mad, we should appeal- as long as you've got the cash to pay us of course.

However I wouldn't want anyone to think that all lawyers are like that. The majority give honest and genuine advice, albeit some advice is right and some is wrong.

White Stick is right again. Lawyers will usually go with the flow providing the client is picking up the tab. I'm guessing that the brief given to the FSCS lawyers was 'find a way we dont have to pay' rather than finding a way to help the thousands of cautious savers duped by the sharp practices of the Financial Services Industry. As a Keydata victIm also my faith in any of those working in the FinSector is probably destroyed forever. We are 'on our own' as the IFAs run for the small print and are more concerned about increasing levies and decreasing commission trails.

I have asked FSCS to direct me to the relevant clauses in the documents I received where they say there were adequate and appropriate warnings of what happens if the organisation backing these products fail. For the life of me I cannot them, the only mention of insolvency is when they hold cash in one of the UK banks. To date no reply but it was only Thursday, but I can guess the reply

I also had much the same comments from NDFA when I approached them after the failure, unfortunately they went into administation before I could get into a real fight

ps -we must be very grateful we have this outlet at least to vent our anger and frustration , we need a united assault to get restitution , MP's will only do so much.

BobR -thats why its so obvious (to us all at least) that the CParty should have been named and its real function explained in bold text . The FSCS Compensation scheme is flagged up (boldly) in the product info as a selling point and safety net- but as we now know is irrelevant as the money was put 'off shore?' in the sprawling Lehmans mess -maybe- we dont know for sure do we as no one has shown us any documentation as proof ! Does anyone feel the FSCS has/is been at all helpful in any of this?

Whilst I hold no brief for IFA's or other professionals, if investors access the NDFA's 'For IFA eyes only' info sheet, found via the Internet, all that one will read is the same as in the T's & C's. Lehmans do not get a mention anywhere!

Tesco, M&S, BT, BP, albeit only as examples of FTSE100 companies, are all referred to in the T'S & C's along with references to Blue Chip companies.Silly old me thought I was investing in the likes of these.

The IFA who introduced me to NDFA's first product, and who I didn't use in the roll-over successor, largely because I was stupid enough to trust NDFA, has since commented that 'we wouldn't have touched it'. That said it was after the collapse of course.

The Missold Investments web site also contains commentary re Lehmans Victims., (and other Victims of Lehmans/ NDFA of course)

The Keydata Vicims were very organised in their quest for retribution. The FSCS say they will respond to individual requests for claim forms if good reasoning is demonstrated -but surely we need a combined approach? We need to have a full explanation from the FSCS , and perhaps the best way top get this is if a Victims War Council were formed (maybe get an MP to front it?) which could seek an urgent meeting with the FSCS to better understand what/where/and why. After that our course will become clearer - a legal approach or mass escape to a friendlier planet.

Why were these people allowed to flog these products.that were obviously very risky to ordinary people after taking advice. The FSCS cannot hide behind some obscure smallprint that no one understood or did not have explained to them.does this not come under consumer rights rules, risks should set out clearly and in plain english.Trading standards people , will they help. Ask for a meeting with the fscs explaining there decision in detail. Haul them up in front of the parlimentry finance committee.

Now we have all vented our spleen, I think we should each formally ask the FSCS for details of where we can each find, in the literature of our respective investments, the sections which they say "adequately and appropriately" meets the the rules of being "Fair ,True and not mis leading" as laid down in the FSA October 9th. review of Structured Products.

They can do this indivually if they wish or post it on their web sites refering to each plan seperately .

If we recieve this information then we can make some informed decisions on the way forward whither they are right or not.

If they do not give this information then we can deem this unreasonable behaviour and may well open up other ways we can approach the problem.

well done Bob, can I suggest we all contact the FSCS individually tomorrow (in writing or by email)and insist they justify and explain their decision making process, we then have more information on which to base our next collective move, I still believe there is strength in numbers and despite the FSCS's suggestion of individual claims we should still also pursue a group action against them

I notice that the risk warnings in the brochures for the "NDFA Capital Secure Fixed Growth Plan March 08" and the "NDFA Fixed Income Plan June 08" relating to the risk posed by the Issuer of the Securities ( counterparty) are IDENTICAL.

How can the FSCS conclude that latter plan contained adequate warnings, whist compensating investors in the former plan. The warnings were the same.

We must all be prepared to go down the legal route. Its (gut instinct) obvious that the individual claim route is like a minefield as they have invested a lot of time and taxpayers money in obstructing our fair and realistic claims for compensation already. We have got to take them on legally on a no win no fee basis. The game has moved on a pace,better to lose a small percentage of the capital than all of it to an unfair and shamefull FSCS decision. Has anyone out there got any legal connections for advice on the way to proceed?

i had the june 08 plan. i have just fired an email to FSCS asking for the specific pages and paragraphs where "adequate and appropriate warnings" were given. lets see what the reply is

When Mr Brown was Prime Minister made a speech when he stated that no private individual lost money due to the collapse of any bank or financial institution due to the measures his Government had put in place. This was untrue then and is untrue today.

The action group web site www.missoldinvestments.co.uk has a brand new discussion forum for Lehman victims (went live yesterday) - much easier to use than the old one.

Sadly, since this news I have become unwell, but at 92 I suppose that's inevitable. I wanted some extra income in retirement and hopefully have something left to leave to my family. Even if FSCS did pay out I've lost over £8,000 in income and would lose another £6,000+ even if the maximum compensation was awarded.

We need early and robust legal action from some of the lawyers who, I understand, have offered their services to key players in the protest group. But personally I am getting too tired and too old to do much more.

In Keydata the FSCS said that the advertsing and marketing material did not meet FSA standards and therefore it would consider claims,but in NDFA the Treasury Minister wrote to my MP and said that NDFA went in to liquidation as at result of direct action by FSA because of NDFA's advice failings and deficiencies in marketing literature within the market place for structured products. I didn't know what a 'structured product' was, but that's beside the point, but advice failings and deficiencies in marketing literature seems to fit the bill for FSCS compensation and seems to reflect what others are saying on this page.

So why the different result? I don't understand it, but then I'm just a confused old woman, so I suppose I don't matter.

Sorry this is not supposed to be a sob story, its just how I feel. As usual I'm grateful to my relative for putting things as I feel them and typing this. I have been told that there is a new web site for us to write on, so perhaps anything else wil have to go on that.

I E-mailed the FSCS on the 30th September after we got their decision regarding compensation asking for a claim form. I have today received an E-mail from Tom Sheffield from the FSCS stating that I need to expand upon the reasons why I believe I have a valid claim for compensation against NDF.

This should include details of what misleading information I was given which I relied on when taking out the policy (thats a joke if ever i heard one)

They will then access whether they can send me an application form.

I will be ringing them tomorrow and if they tell me I cannot have one, I will be bringing a formal complaint against them

I have also now been waiting since March when my complaint against my IFA was upheld by an adjudicator bt my IFA appealed against it am waiting for an ombudsman but the FSO inform me they are working 12 months behind and they have no idea when my case will be looked at, I think that warrants another complaint.