Questions and answers
- What is the FSCS?
- How can I find out if a firm is covered by the FSCS?
- What if I have a complaint against a firm that is still trading?
- How do you decide whether you can help me?
- Do I have to pay anything to have my claim considered by the FSCS?
- How long will it take?
- Why are there limits to compensation?
- Does compensation cover any guarantees I was given?
- What happens if the firm I am claiming against was insolvent or declared in default before the FSCS took over responsibility for compensation (1 December 2001)?
- The firm I dealt with is no longer trading, but the FSCS says it cannot help me. Why?
- Who is eligible to make a claim to FSCS? Are businesses or charities able to claim?
1. What is the FSCS?
The Financial Services Compensation Scheme (FSCS) is the UK's "fund of last resort", responsible for paying out to customers of financial services firms who have lost money after a firm has entered default.
The FSCS is an independent body, set up under the Financial Services & Markets Act 2000 (FSMA). It deals with claims against firms authorised by the Financial Conduct Authority or the Prudential Regulation Authority.
The FSCS can pay compensation to consumers if a financial services firm is unable, or likely to be unable, to pay claims against it.
It is separate from the Financial Ombudsman Service, which deals with complaints against authorised firms that are still trading.
We do not charge individual consumers for using our service.
2. How can I find out if a firm is covered by the FSCS?
You can find out whether a firm is authorised by using the FCA's search bar or by calling its helpline on 0800 111 6768. It will be able to tell you if the firm is still authorised to trade.
3. What if I have a complaint against a firm that is still trading?
You should complain directly to the firm in the first instance. If you aren't satisfied with its response, you can take your complaint to the Financial Ombudsman Service.
4. How do you decide whether you can help me?
Eligibility for compensation depends on the type of product you bought and the amount you have lost. We first look at whether a firm is authorised and then the type of loss. We follow the rules set by the FCA and PRA on eligibility. Read our eligibility rules for more information.
5. 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. We do not charge individuals for using our service. If you receive any communication from anyone claiming to represent the FSCS and asking for payment, do not offer your financial details as this could be fraud.
6. How long will it take?
It depends on what the claim is for:
- Claims against deposit takers
FSCS will aim to pay compensation in the majority of cases within seven days of a bank or building society or credit union failing. Any 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 a completed claim application, or within six months of the company being declared in default (whichever is later).
See general guidelines for each claim type.
7. Why are there limits to compensation?
Our rules tell us which types of claim are eligible for compensation and limit how much compensation we are allowed to pay. There are limits to the protection FSCS can provide. (See also Question 5).
To be eligible for compensation you must have lost money because of your dealings with a regulated financial services firm. The FSCS can pay compensation only for financial loss. 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.
8. Does compensation cover any guarantees I was given?
The FSCS only pays compensation for financial loss. If a return on an investment or policy states "guaranteed", this doesn't mean that FSCS can pay compensation to cover the "guaranteed" amount.
9. What happens if the firm I am claiming against was insolvent or declared in default before the FSCS took over responsibility for compensation (1 December 2001)?
Currrent rules are not applied retrospectively - it will be the rules that were in force at the time of the default that apply to your claim.
Historic limits can be found on the following pages:
10. The firm I dealt with is no longer trading, but the FSCS says it cannot help me. Why?
A firm that is no longer trading is not necessarily in default and may still have assets that could meet your claim. In cases where the firm is still trading, you must make any claim to it directly in the first instance. If this fails, you could seek legal advice or contact the Citizens Advice Bureau. The Financial Ombudsman Service may be able to help you meet the claim.
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.
11. Who is eligible to make a claim to FSCS? Are businesses or charities able to claim?
Individuals are generally eligible to make all types of claims. However, there are stricter rules governing the types of claims that business, charities etc. can make.
FSCS is responsible for deciding eligibility once an authorised firm has gone into default. We will look at the relevant rules covering the different types of claims (e.g. investments, deposits, insurance) as part of this. Even if a claimant is eligible for compensation, they must also have a protected claim against the firm in default. The requirements for a protected claim are different depending on whether it’s a deposit, investment or insurance claim: click on any of the links to access the rules governing that area.
Most types of claimants are eligible to claim compensation for deposits. But there are some limited exceptions, such as claimants who are authorised financial services firms or public bodies. More information can be found under rule 2.2(4) of the Depositor Protection Rules.
Eligibility for investment claims under the COMP rules is generally more restricted – certain exclusions and exceptions apply. For example, large businesses are typically not able to claim compensation unless they meet any of the exceptions.
Charitable status alone is not a relevant factor in deciding eligibility. FSCS will look at, among other things, the legal set-up of the charity. For example, a charity that is a large company will generally be able to make a deposit claim but not an investment one.