Deposit claims

If you have a claim against a credit union

FSCS will usually be notified by the FSA that a credit union is insolvent. From 7 October 2008*, FSCS can pay compensation for financial loss of up to £50,000 for deposit claims (100% of the first £50,000) if a deposit-taking firm (such as a credit union) is unable to pay back deposits it owes to its members. For claims against credit unions declared in default between 1 October 2007 and 6 October 2008, the maximum level of compensation is £35,000 (100% of the first £35,000). For claims against credit unions declared in default before 1 October 2007, the maximum level of compensation is £31,700 (100% of the first £2,000 and 90% of the next £33,000).

Deposits made by private individuals to any UK authorised firms are protected by FSCS. These can be referred to as "retail deposits".

How we handle claims for compensation against a credit union

  1. Before FSCS can pay claims for compensation it must be satisfied that the credit union is unable to pay back money it owes to its members (described by us as being "in default"). We look at the credit union's records to help us decide this. A declaration of default by FSCS opens the way for members of the credit union to claim compensation from us.
  2. To claim compensation from us members of the credit union will need to complete and return our application form, which will be sent to them.
  3. If any members of the credit union are suffering immediate financial hardship we will try to prioritise their claim.

If you think you have a claim against a credit union

If you think you have a claim against a credit union but are not contacted, or if you are worried about what is happening with your claim, please contact us.

  • Where possible we will pay compensation by cheque, but we will consider other alternatives for those claimants who do not have a bank or building society account.
  • FSCS is obliged to seek to recover all sums of money owed to the credit union whether or not the particular member applies for compensation. We will reduce the claim for compensation by the amount of any outstanding loan.

 

If you have a claim against a bank or building society

If you have an account with a bank or building society that becomes insolvent you will be contacted by the liquidator or by FSCS. You may need to fill in an application form that we will send to you.

*From 7 October 2008, FSCS can pay compensation for financial loss of up to £50,000 for deposit claims (100% of the first £50,000) if a deposit-taking firm (such as a bank, building society or credit union) is unable to pay back deposits it owes to its members. For claims against credit unions declared in default between 1 October 2007 and 6 October 2008, the maximum level of compensation is £35,000 (100% of the first £35,000). For claims against credit unions declared in default before 1 October 2007, the maximum level of compensation is £31,700 (100% of the first £2,000 and 90% of the next £33,000).

Amounts owed to a failed bank (for example loans, mortgage or credit card debts) are taken into account before any compensation is paid.

If you think that you have a claim but are not contacted, or if you are worried about what is happening with your claim, please contact us.

Deposits made by private individuals to any UK authorised firms are protected by FSCS. These can be referred to as "retail deposits".

 

What is the position for people who have multiple accounts with banks that are subsidiaries of another bank?

We have received some enquiries about how we would apply the compensation limits to people who hold multiple accounts in banks that are part of a larger group. If each of the banks is separately authorised by the FSA:

  • FSCS would pay compensation up to the limit of £50,000 per person, per authorised institution.

If each of the banks is not separately authorised but is covered by the parent company's authorisation:

  • FSCS would pay compensation up to the limit of £50,000 once, irrespective of how many different institutions a person held accounts with.


How do you find out if your bank is covered by the FSCS?

FSCS covers firms authorised by the FSA. A list of the banks authorised by the FSA can be found on the FSA website. If a UK bank is not listed on the FSA site, it is likely to fall under a group authorisation. A group authorisation can be issued to cover a collection of banks as long as they are owned by the same parent company. If you have a question about how a bank or building society is authorised, please check the list on the FSA's website or contact the FSA Consumer Contact Centre on 0845 606 1234.

FSCS may also be able to help if you have an account with a UK branch of bank incorporated in another European Economic Area (EEA) state.

 


More information

For more information about claiming compensation you can download a copy of our Claiming compensation booklet. If you would like us to post you a copy, please contact us.

Deposits frequently asked questions

 

Claims before 1 December 2001

Slightly different rules apply if you have a claim against a deposit-taking firm that was insolvent or declared in default before FSCS became operational (1 December 2001). The claim is covered by the rules governing the Deposit Protection Scheme, which existed before that date, although we will handle your claim. Compensation limits and eligibility may differ.