Protection and compensation

VIDEO- Benedict Cumberbatch explains FSCS

IMPORTANT FACTS- The Financial Services Compensation Scheme (FSCS)

• The Financial Services Compensation Scheme (FSCS) provides compensation if a UK financial services firm cannot pay the money it owes you.
• This covers products such as bank accounts, insurance and some types of investments. Different rules and compensation limits apply depending on what the claim is for.
• Broadly speaking the FSCS will cover £85,000 of deposits held in banks, building societies and other savings or current accounts. The limits are for one person’s claim against one FCA-authorised firm. So you are only covered up to the limit once against a particular firm, no matter how many different accounts you have with them.
• Many deposit-taking firms operate using different trading names which are not separately authorised by the FCA. You may find that you have deposits with different banks but they are actually linked and operate under one single authorisation. This would mean that the maximum you would receive is £85,000 irrespective of how many accounts you have with different parts of the firm. This table on the FCA’s website lists the largest UK deposit takers and how they are authorised by the FCA. It shows how the FSCS limits would apply for most customer accounts – it is not a complete list of deposit takers covered by the FSCS.
• The link above also gives details of compensation available for other services such as airlines, goods & services, Christmas Savings Schemes, etc.

VIDEO- FCA explain their service.

IMPORTANT FACTS-Financial Conduct Authority (FCA)

• A quasi-governmental agency formed as one of the successors to the Financial Services Authority (FSA).
• It regulates financial firms and maintains the integrity of the UK’s financial markets.

What does FCA do?

• supervises workings of 26,000 financial firms and regulates the prudential standards of 23,000 of those
• fights financial crime and help firms protect themselves against criminal activities (such as money laundering, fraud, scams and swindles)
• champions best practices in staff training and advice services
• enforces best standards of behaviour amongst firms
• promotes effective competition

VIDEO- Description of FOS in their own words, using Viking ships.

IMPORTANT FACTS - Financial Ombudsman Service (FOS)

• The Financial Ombudsman service is an independent body which acts on behalf of the consumer who feels they have been mistreated by a financial company.
• It is funded by law through a levy on the banking system.
• It is free for consumers, informal and impartial.

Consumers must make a formal complaint to the financial institution in the first instance. If they are unhappy with their response then they can ask the FOS to look into their complaint. FOS take complaints on the following topics:

• banking
• insurance
• mortgages
• credit cards and store cards
• loans and credit
• pensions
• savings and investments
• hire purchase and pawnbroking
• money transfer
• financial advice
• stocks, shares, unit trusts and bonds.
• PPI mis-selling (special unit)