While you may have read plenty on the Financial Services Compensation Scheme, you may not know why it exists or what it does.
What is the Financial Services Compensation Scheme?
The Financial Services Compensation Scheme, also known as the FSCS, is an independent body. It was set up to protect people from financial firms when they fail.
Since being set up via the Financial Services and Markets Act in 2001 they have helped millions of people and paid out billions in compensation.
What does the FSCS cover?
Like the Financial Ombudsman Service (FOS), it handles claims relating to regulated financial institutions in the UK. This includes disputes over banking, insurance, pensions, investments or PPI.
What makes the FSCS different?
All the claims it handles have one common factor – they deal with failed firms. Whether that means firms that went out of business, or firms simply unable to pay for claims against them, the FSCS deals exclusively with these firms, which have been declared ‘in default’.
Whether these companies are pension providers, loan facilitators or financial advisors, the FSCS will protect consumers from the actions of these regulated firms where they have failed in upholding their responsibilities before collapsing.
For example, just last year, the FSCS was inundated with claims against Beaufort Securities for their actions towards clients. You can read more about Beaufort Securities here.
They have also paid out millions to victims of the InvestUS real estate scam. Hundreds of our clients invested their life savings following advice from Avacade. You can read more about the case here.
The FSCS process
The claims process is made as simple as possible to suit the average consumer. It doesn’t take long to find out initially if your claim may be valid. In fact, last year, the FSCS responded to 91% of complaints within 20 working days.
While some cases are resolved within 12 weeks, more complicated cases can take more than a year.
Can the FSCS help me?
Last year, the average pension scam cost the victim £91,000. Although the FSCS compensation limit has been increased from £50,000 to £85,000 it may still be an unsuitable route for many.
We are able to explore alternative routes such as litigation. You can read more on the benefits of seeking a solicitor’s help here.
Our experts deal with the Financial Services Compensation Scheme on a daily basis. If you think you have a claim, get in touch for a free consultation.