7. Consumer Awareness Campaign Q & As

 

7.1. What is FSCS?

FSCS protects UK regulated savings, investments, insurance and mortgage advice and arranging. It was set up by the Government in 2001 under the Financial Services & Markets Act 2000 (FSMA) and is funded by regulated UK financial services. FSCS is independent and does not charge consumers to use its services.  

7.2. What are the FSCS compensation limits?

  • Savings - Protects up to £85,000* per individual and £170,000* for joint accounts per banking authorisation. 
  • Investments - Protects up to £50,000 per person per firm (for claims against firms declared in default from 1 January 2010).
  • Home Finance (e.g. mortgage advice and arranging) - Protects up to £50,000 per person per authorised firm (for claims against firms declared in default from 1 January 2010).
  • Insurance Business: unlimited. 
  • Insurance Business: there is no upper limit on the amount of protection(for claims against firms declared in default from 3 July 2015)

    Long-term insurance benefits are protected 100%. 
  • Claims under compulsory insurance, professional insurance and certain claims for injury, sickness or infirmity of the policyholder are protected at 100%
  • Protects 90% of other types of claim with no upper limit.
  • For more details visit our Insurance Limits page.

  • General insurance advice and arranging - Protects 90% of the claim with no upper limit.  (for business conducted on or after 14 January 2005).

Since 2001, FSCS has protected 4.5m people and paid out more than £26bn in compensation, for example to customers of the failed Icelandic banks and on major investment failures such as Keydata Investment Services Ltd.  

7.3. How long will it take to get compensation from FSCS?

Claims against deposit takers - FSCS pays the vast majority of claims back within seven days of a bank, building society or credit union going bust. Remaining claims, which are likely to be more complex, will be paid within 20 working days. Claims against all other companies - FSCS tries to resolve all claims against Investment firms, Insurance Brokers, and Mortgage Brokers within six months of receipt of your correctly completed Claim Application Form, or within six months of the company being declared in default (whichever is later).  

7.4. What did FSCS acheive in terms of raising awareness in 2016/17?

Consumer awareness of deposit protection is currently at 77% (up from <10% when the programme began). Depositors confidence that “my money
is safe” is 78%, with a similar number saying the FSCS campaign makes them feel protected. 78% are reassured knowing FSCS exists and 63% say they trust banks and building societies more knowing FSCS protects them.

FSCS featured in almost 5,000 media articles and about 11,000 social media mentions during the year. Our PR messages reached 85% of all UK adults an average of 105 times during the year according to independent evaluation. The top messages were: there are limits to the
protection FSCS provides; the range of FSCS protection; FSCS being funded by the industry.

7.5.  What are FSCS's aims for 2017/18?

  • We shall maintain awareness of deposit protection of at least 70% of the population.
  • We shall build on the work we commenced this year with the insurance industry to raise consumer awareness of FSCS protection.
  • We shall seek to agree voluntary guidelines with deposit takers for the use of the FSCS protected badge on relevant materials.
  • We shall continue our PR and stakeholder work across the full range of FSCS protection, eg. following the failures of firms.

7.6. Why isn’t FSCS talking about the other products it protects?

We are targeting a specific group and have called them the ‘In need of help’. This audience has grown from 17 million in just two years and now accounts for nearly 21million people. This group  is likely to be with a Prudential Regulation Authority (PRA) authorised savings institution. They are therefore automatically protected.  However they are not interested or engaged with finance or savings issues, over 40 per cent of them have less than £5,000 in savings and in addition, they remain cynical – they trust media more than they do information from institutions. 

We are also targeting those who have deposits over £85,000* and who are not aware that an element of their deposits may be at risk. It is important to remember that although the campaign is about deposits, FSCS communicates regularly about other financial products in its work.

7.7. How much is FSCS spending on this awareness programme?

The spend on the consumer awareness programme equates to less than 0.5% of the amount spent yearly by the financial services industry on marketing and advertising.

FSCS operates within the Government procurement arena, to ensure that agencies working with FSCS are able to demonstrate strong value for money. This also allows FSCS to benefit from the considerable buying power from those arrangements and the significant savings it provides. 

7.8. Who is paying for the advertising and marketing?

FSCS is funded by UK authorised financial firms. The cost of the consumer awareness programme is being funded by firms in the deposit class only. FSCS research shows that the more aware people are of FSCS, the more confident they are and likely to buy products. FSCS is working with the industry to convey the protection message directly to consumers. In addition, our strategy was developed with full input and support from a Consumer Awareness Advisory Panel of trade bodies and consumer organisations. 

7.9. How will this awareness drive benefit firms and consumers?

Research shows the importance of people knowing more about FSCS. Building awareness of FSCS helps to build consumer confidence and aids financial stability. This is a priority for the tripartite authorities (Bank of England, HM Treasury and PRA) as part of the measures taken to improve financial stability following the problems of 2007. The reassurance provided by awareness of FSCS contributes to consumer confidence and financial stability. The campaign budget of £3m equates to less than 0.5% of the amount spent yearly by the financial services industry on marketing and advertising.  

7.10. How will you know if you are successful?

FSCS has set a five-year objective to reach 70 per cent public awareness of FSCS or a protection scheme. As at December 2016 consumer awareness of deposit protection is at 77% (up from <10% when the programme began). Depositors' confidence that “my money is safe” is 78%, with a similar number saying the FSCS programme makes them feel protected. 78% are reassured knowing FSCS exists and 63% say they trust banks and building societies more knowing FSCS protects them. Our consumer awareness programme has been designed to reach that awareness level in slow, consistent increments.

We also have a robust independent research and evaluation framework in place which has allowed us to analyse and refine our activity.  

7.11. Do the industry bodies support this?

This programme has the support of the industry organisations and trade bodies who see benefits in consumers being more aware of FSCS protection. The costs of the programme are shared across the full range of financial services and do not result in a large bill for any firm.

Firms also believe it is important that consumers know about the protection available to them and we have provided them with independent research demonstrating how awareness of FSCS or a protection scheme impacts on potential purchase.   

7.12. Why does FSCS even need to do this when surely people know enough about the Scheme following the banking crisis?

Consumer confidence in the UK finance industry has not fully recovered since the banking crisis. Our research shows there is still a need for greater consumer awareness to reassure consumers. Currently over 60 per cent of the public are aware of FSCS or a protection scheme, and while we have seen an increase of more than 30 percentage points about the ‘awareness of a protection scheme’ since 2008, we are still behind other countries. For example, the protection scheme in the US, the Federal Deposit Insurance Corporation, regularly measures an awareness level of more than 80 per cent among the general public.

Our mystery shopping results also show that awareness levels also need to improve significantly among frontline staff in banks, building societies and credit unions. They have direct contact with consumers and can make a real difference.

7.13. How might the programme impact on my financial services business?

As with any marketing programme, with raising awareness comes more publicity, whether on TV, radio, press or online. 

Consequently, we would expect a potential increase in FSCS questions being raised with frontline staff and call centres. It will be important for your business and customers that staff can provide the correct information so we have provided some tools to help you (see Q14.)

We will be encouraging consumers to check through online tools (such as the FSCS Protection Checker) or with their bank, building society or credit union that their savings are within the safety limits and with PRA authorised firms.

Since 2001 FSCS has protected more than 4.5m people and has paid out more than £26bn in compensation.

7.14. How can my business help raise awareness? (deal with queries/what tools) In preparation for the Awareness programme launch, we have a variety of tools that could help your frontline staff.

  • FSCS introduction video – 60 second video that raises the most important things consumers should know about FSCS: 

 

  • FSCS e-learning module – 15 minute online learning tool designed to help your staff improve their knowledge of FSCS and its limits.

7.15. Will the advertising worry customers?

The advertising material has been carefully crafted to be informative, clear and reassuring. The wording has been researched to ensure that the tone of voice is also appropriate. Our previous advertising has not worried people, and research has shown that it has helped to reassure consumers. 

The message is one of reassurance and is not aimed at causing panic for consumers. The campaign has been carefully crafted to be informative, clear and reassuring.  The wording has been researched to ensure that the tone of voice is appropriate. 

FSCS is simply offering peace of mind by informing customers of FSCS protection and the checks they can make to ensure their savings are protected.  

7.16. What are the FSCS disclosure materials?

As consumer awareness increases, so will awareness of disclosure materials in branch and online.

In August 2012, UK authorised banks, building societies and credit unions were required to tell customers their savings and deposits are protected by FSCS. Firms were required to display FSCS stickers or posters in branch windows, along with a sticker at the cashier’s window or desk, and a further poster in a prominent position inside. Information on firm websites was also required.

The UK branches of foreign banks from the European Economic Area (EEA) have to specify that their customers are not covered by FSCS and clearly state which national scheme provides protection.

This action followed the introduction of new FSA (the UK's previous financial regulator) rules obliging deposit takers to display information about FSCS protection available to consumers.  

7.17. Where can my business get more disclosure materials?

Disclosure materials are a regulatory requirement for PRA authorised firms only. These are available on the Industry section of our website.  

7.18. Where is the campaign appearing/what media are you using?

You will see our messages in newspapers and magazines, on-line and on the radio. 

7.19. Why are you not using television as it has impact and reaches a lot of people?

Television does have the ability to reach a lot of people, but it is not necessarily the most cost effective media to reach our target audience.  

Our research has shown that the ‘in need of help’ target audience are engaged in digital and are responsive to radio, both of which are very cost-effective channels.  

We have therefore devised a media plan which will cost -effectively reach our target audience via their preferred media channels, subject to budget considerations. The plan has been put together to deliver our messages throughout the year on an on-going basis to help keep FSCS protection at the front of people’s minds.

7.20. Why doesn’t the advertising cover other protected products eg insurance, investments etcetera?

We learnt from Phase 1 (January – March 2011) that we had to focus single-mindedly on one product. The product that most people have most experience of is deposits or savings in common parlance. Of all financial products, savings are also the most common. Once we increase awareness levels for deposits, we can look at different ways to build awareness of FSCS protection in other products. We might find that marketing is not the most effective route to achieving this and instead look at alternative approaches.

7.21. Why are you using this graphic style?

We wanted to find a way of communicating to our target audience that we are here to protect their savings in an engaging way. We also wanted advertising which would stand out and look and feel different to other financial services advertising. We have done this by depicting two different things people typically save for, using an optical illusion where both objects can be seen within the same image.

7.22. Has FSCS changed its logo?

No. We have developed the ‘FSCS protected’ badge for the industry to use on simple products and in-branch. It also appears in our advertising. The badge is for banks, building societies and credit unions to feature on their own materials to provide customers with the reassurance that their money is protected. The badge has been designed to bring comfort to customers whilst retaining the core identity of the FSCS logo. The existing FSCS logo will remain on all other business documentation.

 

*From 3 July 2015, the FSCS provides a £1 million protection limit for temporary high balances held with your bank, building society or credit union if it fails. Read our Q&As about temporary high balances for more information.


The FCA

The Financial Conduct Authority website includes a searchable database of all firms authorised and regulated by the FCA and the Prudential Regulation Authority (PRA).

The FOS

The Financial Ombudsman Service is the official independent expert in settling complaints between consumers and financial businesses

Jargon Buster

  • Authorised firm

    a company, unincorporated body, partnership or individual permitted to carry out a regulated activity by the FCA or the PRA. This term includes a mutual (unincorporated) organisation, for example a friendly society.
  • Credit union

    a financial co-operative which is owned and controlled by its members.
  • Deposits

    money placed in a bank or similar institution to earn interest or for safe-keeping.
  • EEA

    European Economic Area.
  • FSA

    Financial Services Authority, was previously the UK's regulator for the finance industry. It was replaced by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) on 1 April 2013.