Eligibility and Claims Process
To qualify for compensation investors need to be eligible under our rules, which are made by the FCA and the PRA. We have a duty to our levy payers to ensure that we only pay compensation for eligible claims.
For investment claims FSCS provides protection, for example:
- for loss arising from bad investment advice, poor investment management or misrepresentation
- when an authorised investment firm goes out of business and cannot return investments or money
Investments covered include: stocks and shares; unit trusts; futures and options; personal pension plans; and long-term investments such as mortgage endowments.
FSCS conducts a full review of each claim to make sure it is eligible for compensation. For example, for negligence claims we will establish whether bad advice has been given and calculate whether the consumer has made a financial loss. If the advice is not found to have been unsuitable, or if no loss has been suffered, no compensation can be paid.
This work involves liaison with third parties, such as product providers and formerly authorised firms, to enable us to look at client files and other information relevant to determining whether a claim is eligible for compensation.
We also follow guidance provided by the regulator where applicable, for example in considering pensions review and mortgage endowment claims, and we liaise with the FOS on their approach to handling claims. The work of our claims teams is reviewed by our Quality Programme Unit.
To claim compensation investors need to fill in and return an application form that we send to them. We also need to see any papers the firm sent the investor about the investments.
For claims against investment firms, FSCS can pay up to £50,000 in compensation per person per firm.