Q&As about Claiming Compensation
How do you decide whether you can help me?
To qualify for compensation you must be eligible under our rules which are made by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), the independent watchdogs set up by government under the Financial Services & Markets Act 2000 (FSMA) to regulate financial services in the UK and protect the rights of consumers. The rules tell us which types of claim are eligible for compensation, and limit how much compensation we are allowed to pay. Different rules and compensation limits apply to different types of claim.
How quickly should I make my claim?
Once you discover there is a problem, contact us as soon as you can. If you are aware that we have declared a firm in default, you should claim compensation from us as soon as possible.
Do I have to pay anything to have my claim considered by the FSCS?
No. The FSCS is a non-profit, independent organisation set up under FSMA. Our service is free to consumers.
Are there any legal time limits on making a claim?
Our rules set no time limit for making a claim for compensation to the Scheme, but there are some dates that may affect your ability to do so. Your claim might also be subject to legal time limits, such as time bars, which can prevent you from being able to make a claim. You may wish to take legal advice about any potential time bars that could affect your claim. If there are any legal time limits that prevent us from helping you, we will write and explain why.
What does 'in default' mean?
The FSCS can only help consumers if a firm is unable, or likely to be unable, to pay claims against it. We describe this as being in default. This will generally be because a firm has stopped trading and has insufficient assets to meet claims, or is in insolvency. We conduct an investigation to establish this.
How long will it take to process my claim?
The length of time a claim takes to process will depend upon a number of factors, like the type and complexity of a claim, and the level of information we need to gather from other sources. Some of these factors may be entirely outside our control, but we are still able to provide general guidelines for each claim type.
How long will my claim take to process if you have not declared the firm in default?
If your claim is against a firm that has not so far been declared in default by us, your claim may take longer than six months to complete. We need to investigate whether or not the firm has the resources to meet claims itself and these investigations can take some time because we rely on third parties for information. We are increasing our resources to try to speed up the process where we can, and we will do everything in our power to ensure that we can reach a decision on your claim as quickly as possible.
If you are facing immediate financial hardship we will try to deal with your claim as a priority. If this is the case please contact us.
What happens if I am facing financial difficulties and need my claim processed quickly?
If you are facing immediate financial hardship, we will try to deal with your claim as a priority. Please contact us.
What do you mean by financial loss?
To be eligible for compensation you must have lost money because of your dealings with an authorised financial services firm. For example, for investment claims the compensation we pay would try to take account of the financial position you would have been in had you not invested.
Will I need legal or professional advice to make a claim?
You do not need to claim through a solicitor, accountant or anyone else. Bringing a claim direct to the Scheme will not cost you anything. If you do decide to instruct someone to act for you, we will not usually be able to pay their fees.
Can you compensate firms as well as people?
As an indicative guide only, for the purposes of deposit and investment claims, smaller companies are protected. A smaller company must meet two of the following criteria (as set out in section 247 of the Companies Act 1985 or section 382 of the Companies Act 2006 as applicable):
- Turnover: not more than £6.5 million
- Balance sheet total: not more than £3.26 million
- Total number of employees: not more than 50
For claims made under an insurance contract, small businesses are protected. A small business under the COMP rules is one that has an annual turnover of less than £1m.
The same levels of compensation apply whether the claimant is a private individual, small business, or a small company.
Will I be covered if I did business through the Internet?
Yes, provided the firm is authorised by the UK regulators and the claim is eligible under our rules.
The firm I dealt with is no longer trading, but FSCS says it cannot help me. Why not?
As a fund of last resort, we can only consider claims if they cannot be paid by anyone else. If the firm is no longer trading but still has assets that could meet your claim, we are unlikely to be able to help you. This means that you will need to take your case up with the firm you dealt with.
If you are having problems finding the firm or its owners and wish to pursue your claim, we may be able to provide contact details. Please contact us.
If the firm (or its owners) will not consider your claim, you could take legal advice or contact your local Citizens Advice Bureau for help.
The Financial Ombudsman Service (FOS) may be able to help you make your claim in some circumstances.