Investors who have lost some or all of their money due to the activities of an investment intermediary such as a broker or financial adviser will soon be entitled to compensation worth 20,000 ecu (about £16,000) or 90 per cent of the sum lost, whichever is the lesser amount.
The compensation scheme is being set up by the summer as a result of the EU Investor Compensation Directive, and the cost of it will be borne by the investment industry.
It is understood that a limited liability investor compensation company is to be set up by the Government with an independent board that will be under the supervision of the Central Bank.
The Consumers' Association of Ireland met with officials of the Department of Finance last month to express their views about the compensation scheme.
The CAI is unhappy that the level of compensation is, in its view, too low and should be increased to £50,000 and that the supervisory function is being given to the Central Bank, which it describes as "unaccountable to anyone, especially to ordinary consumers".
The 20,000 ecu or £16,000 limit has been set by the EU because it is seen as an average single premium investment, mainly associated with the life assurance industry.
But the CAI points out that 16 people defrauded by Tony Taylor lost more than £100,000 each and that the compensation limit is inadequate if, as expected, the scheme is to be extended to investment intermediaries.
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