After going over the files of thousands of clients ripped off in Macquarie Bank’s financial planning scandal, compensation has been awarded to just 163 people — in a process that has been labelled “farcical” and a “catch-22”.

Macquarie says its compensation process has been “comprehensive and rigorous”, but critics are outraged that just 6 per cent of the customers who lost money have been compensated for the bad advice.

The compensation was ordered as part of an undertaking between the bank and ASIC, which forced Macquarie to contact the 190,000 people potentially affected by its malpractice.

As of October 30, Macquarie had gone back over 2,650 client files, judging that only 163 clients were eligible for compensation.

The bank has fallen victim to its own failure to document advice to clients, but it is now denying compensation on the basis that its brokers and financial planners gave no personal advice.

Josh Mennen, a principal lawyer at Maurice Blackburn, has told the ABC that it is a no-win situation for clients.

“What Macquarie is doing is using the fact that there is no statement of advice to deny that personal advice was given at all,” he told reporters.

“So the customer is left in a catch-22 situation.”

Lawyer John Berrill – who recently represented over 100 people that lost vital life savings in the Macquarie scandal – agrees.

“They were saying we didn't give you personal advice, so we don't have to compensate you for it, the losses you suffered are not on our watch,” he said.

“It's a nonsense.”

“I have a client who was an ex-policeman; he was medically retired as a result of back injuries and psychiatric injuries,” Mr Mennen said.

“He was on a disability support pension.

“All of these facts were known by Macquarie when they gave him advice and yet they told him he was a growth investor.

“And they told him take out a huge margin loan.

“Now the funds that they used to invest, they're all gone. They're all blown up.”

Macquarie has issued a statement claiming its client review “is a comprehensive and rigorous process ... based on consistent application of the Financial Ombudsman Service's approach”.

“As part of the client review process, a case manager carries out a substantive assessment of the client's file, which takes into account all relevant information and goes beyond a documentary review.

“This assessment is then peer reviewed by a second case manager and considered by a review panel before a determination is made.”