Notes for editors
FSCS is the UK's statutory compensation scheme that protects customers of authorised financial services firms that carry out certain regulated activities. FSCS protects deposits, investment business, home finance (mortgage) advice, life and general insurance, insurance broking and debt management.
FSCS can pay compensation if an authorised firm is unable to pay back money it owes its customers in connection with a regulated activity. The Scheme was set up by Parliament in 2001 and is funded by the financial services industry.
Declaring a firm in default
Before FSCS can pay compensation, it must be satisfied that a firm does not have sufficient assets to meet claims. It describes this as being ‘in default’. The Scheme will declare a firm in default if:
- it has received at least one claim; and
- it is satisfied that the financial services firm that has failed is unable to return money to eligible claimants itself.
FSCS is required to do this before it can pay compensation to eligible claimants.
Declaring a firm in default allows private individuals who have suffered actual financial loss as a result of their dealings with that firm to apply to the Scheme. Some businesses and charities may also be eligible, depending on the type of claim.
Dealing with a Financial Conduct Authority (FCA) or Prudential Regulation Authority (PRA) authorised firm that is carrying out certain authorised activities gives consumers access to the Financial Ombudsman Service (FOS) and FSCS. Consumers can check that the firm they are dealing with is authorised by using the FCA’s Financial Services Register.
An ISDN line is available if you are interested in arranging a radio interview with an FSCS spokesperson. Please get in touch with our public relations team email@example.com to arrange a suitable time and date.