THOUSANDS of investors who lost money in split-capital investment trusts have just two weeks left to apply for compensation.

About 50,000 people are thought to be eligible for payouts from the £144m splits compensation fund, set up in January by the Financial Services Authority, the City regulator.

However, only 18,000 investors, just over a third, have lodged claims with Fund Distribution Limited (FDL), the firm administering the fund on behalf of the FSA.

Some financial advisers have blamed the unwieldy application forms for the low take-up and have called on FDL to extend the deadline.

Peter McGahan of Worldwide Financial Planning said: “Some clients do not know where to start when faced with the forms. I am happy to help, but I am having to charge some people a fee of £600 to cover my time. FDL has a moral responsibility for investors and should consider extending the deadline.”

But Mike Ellis, FDL commissioner, defended the firm’s record. He said: “We need to stick with the deadline so that we can get compensation payments to people this year. Anyone having trouble with the application form should call our helpline on 0845 606 6389.”

Ellis also denied claims that FDL was taking up to 14 days to send out application forms. “We are turning round requests in 24 to 48 hours,” he said.

The compensation fund was set up to deal with only one of the three types of splits — income, capital and zero- dividend preference shares. FDL deals only with the latter.

Zeros aim to return a target sum to shareholders on a set date and were widely promoted as a “safe” way to save for retirement and school fees.

However, they proved to be far from safe. Many splits had borrowed heavily to invest in each other’s shares. When the stock market dived in 2001, these cross-holdings exacerbated their losses and investors lost up to £600m.

The FSA wanted the firms involved to hand over £350m to cover some of the losses, but it settled on £144m in January.

You will be eligible to claim from the fund if you owned zeros between July 1, 2000, and June 30, 2002. It was during this period that splits managers are alleged to have colluded to prop up the sector by issuing new shares that were bought by other splits managers.

If you owned zeros at other times, you can still pursue a claim for mis-selling compensation via the Financial Ombudsman Service (0845 080 1800 or www.financial-ombudsman.org.uk). But with the ombudsman, unlike the compensation fund, you cannot claim simply because you have lost money.