Customers of a now-defunct Huddersfield car dealership are in line for thousands of pounds compensation.

The government’s Financial Services Compensation Scheme (FSCS) said it was handling seven claims with an estimated value of more than £16,000 in respect of Richard Alexander Ltd, which collapsed in December, 2008.

The firm had a string of car dealership sites, including one at Leeds Road, Huddersfield. That site and five others were subsequently sold by administrators to Synter Group which now owns Huddersfield Volkswagen trading from the site at Leeds Road, but which has no connection with Richard Alexander Ltd.

A spokeswoman for the FSCS said the scheme had already started paying compensation in respect of the defaulted firm.

The FSCS was established to protect consumers when authorised financial services firms go bust. It protects customers’ deposits, investments, home finance and insurance. Since its launch in 2001 the FSCS has come to the aid more than 4.5m people, paying out more than £26bn in compensation.

A declaration of default means the FSCS is satisfied that a firm is unable to pay claims for compensation made against it and opens the way for customers of that firm to make a claim.