1st December 2008
The FSCS is stepping in to help 10,000 customers of London Scottish Bank plc after the firm went into administration late yesterday (30 November). At the same time, the Government announced it would protect eligible retail depositors with balances above the FSCS limit.
Loretta Minghella, FSCS Chief Executive, said: "We know that customers of the firm will be concerned about the safety of their deposits. We have put plans in place to help customers of London Scottish Bank and are ready to act. As soon as we have access to customer contact details, we will write to depositors individually and provide more information on timescales. FSCS will do everything it can to get people their money back quickly."
Going into administration put the London Scottish Bank plc into default for FSCS purposes. This means that the firm is unable or likely to be unable to pay claims against it. That paved the way for the FSCS to step in and help customers of the bank. FSCS will send application forms to London Scottish Bank plc depositors once it gets access to the company records that it needs to start the compensation process.
Eligible customers of the firm will be paid by the FSCS in a combined claims process that includes the HM Treasury "top up" for FSCS eligible depositors with balances above the current £50,000 limit.
London Scottish Bank plc is a bank based in Manchester with about 10,000 depositors with deposits in a range of fixed term accounts. FSCS will pay compensation to eligible customers with fixed term accounts as quickly as possible after the date of maturity covering their deposits plus the interest owing under their terms and conditions.
FSCS will be writing to depositors individually to let them know how they can apply for compensation.