The Financial Services Compensation Scheme (FSCS) can pay compensation for 39 firms recently declared in default and for one firm declared in default by the Financial Services Authority (FSA). Consumers can claim up to £48,000 for the 29 investment firms declared in default by the FSCS and the firm declared in default by the FSA for ICD claims. This is made up of 100% of the first £30,000 and 90% of the next £20,000. The remaining ten firms are general insurance intermediaries, for which FSCS can pay compensation of up to 100% of the first £2,000, plus 90% of the balance of a claim. Compulsory insurance, such as motor insurance, is protected in full.
Declaring a firm in default means a firm regulated by the FSA (such as a financial adviser) has been found by FSCS to be unable, or likely to be unable, to pay claims against it. This means that customers who have lost money as a result of dealings with one of these firms might be able to claim compensation from FSCS.
Jonathan Clark, FSCS's Director of Claims said: "FSCS is here and people who have suffered a loss when an authorised financial services firm fails have somewhere to turn to. Anyone who thinks they may have lost money as a result of dealing with any of the firms listed should contact FSCS as we may be able to help."
FSCS covers investments, deposits, insurance, mortgage advice and arranging (from 31 October 2004), and advice about general insurance and the arranging of policies (from 14 January 2005).
