FSCS Protecting your money pdf - Virgin Money

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FSCS Protecting your money pdf - Virgin Money

Protectingyour moneyA guide to how the FinancialServices Compensation Scheme(FSCS) protects your money


About this leafletThis leaflet explains whatFSCS is and how we protectyour money. You should stilltalk to your financial servicesfirm to discuss how ourprotection applies to theproducts and services youhave bought from that firm.About FSCSFSCS is the body that can pay youcompensation if your financial servicesprovider goes bust.In brief, that means we can pay youcompensation if a financial servicesfirm stops trading and you lose moneybecause of your dealings with it.FSCS is independent. It was set up bygovernment under the Financial Servicesand Markets Act 2000. The financialservices industry funds FSCS and thecompensation we pay. We do notcharge anyone for using our services.2


Protecting your moneyWhat is a financialservices firm?Examples of financial services firms include:• banks• building societies• credit unions• insurance companies• insurance brokers• independent financial advisors (IFAs)• mortgage brokers• investment firms.What is a financialservices product?Examples of financial services products are:• current accounts• savings accounts• ISAs• investments• insurance policies.We also cover independent financialadvice, insurance broking and mortgageadvice and arranging.There are limits to how much compensationwe can pay, and these are different fordifferent types of financial products. For usto pay you compensation, your financialservices firm must be authorised by theFinancial Services Authority (FSA).What sort of firms does theFSCS cover?We only cover financial services firmsthat the Financial Services Authorityhas authorised to do business in the UK.So you should always check that the firmhas an FSA authorisation (sometimesreferred to as a Firm Reference Number).3


Protecting your moneyThere are two important points to rememberabout the deposit compensation limit.1. The limit applies to individuals notaccounts. This means that for joint accountsthe limit applies to each named accountholder. So, for example, if you have a jointaccount with your spouse or partner, and noother accounts of your own, you could eachreceive up to £85,000 under the depositlimit. That means we would protect up to£170,000 of savings in a joint account.2. The limit applies per authorised firm.This is important because sometimes afirm operates more than one brand underthe same authorisation number. Thismeans individuals with accounts held withdifferent brands operating under the sameauthorisation number will only be entitledto a total of £85,000.The deposit limitIf you have a current account with BankX and savings with Bank Y and they shareone FSA authorisation, they are classedas a single firm. This means your limit forcompensation is £85,000 in total, sharedacross Bank X and Bank Y.You should therefore check:1. whether you hold deposits with a bankor building society that shares FSAauthorisation with another brand, and2. whether your total deposits with allthose brands are more than £85,000.How to find out if your bank or buildingsociety is part of a larger banking groupYour bank or building society shouldprovide this information to you at leastannually on your printed statement orelectronically. There are three otherways to check:1. Ask your bank or building societywhether it trades under differentnames with a single FSA authorisation.2. Visit the page on the FSA’s websitewhich shows banks that are part of alarger banking group: www.fsa.gov.uk/bankinggroups.3. Compare your banks’ and buildingsocieties’ FSA registration numbers tocheck if any are the same – if they arethe same, they share authorisation.The diagram below shows an example:Current account with Bank brand X XSavings account with Bank brand YSingle FSA authorisationSingleFirmSingle limit: £85,0005


Arranging and advising abouthome finance such as mortgagesFSCS may be able to help if a firm hasadvised you to enter into a mortgageagreement that wasn’t suitable for you, andyou lost money as a result. If the firm goesbust and cannot pay back the money itowes you, we can pay compensation.Compensation limitWe protect up to £50,000 per personper authorised firm.> Insurance policiesFSCS can pay compensation if yourinsurance firm goes bust and cannot payvalid claims under your policy or returnyour premiums. The types of policies wecover include motor, home, pet, traveland payment protection insurance (PPI).We also cover long-term policies suchas life or pension policies.Compensation limitOur main aim is to get continuity ofcover for policyholders. This means, forexample, we may try to transfer yourinsurance policy to a new insuranceprovider. If this is impossible, we canpay compensation of 90% of your claimwith no upper limit. We protect in fullany compulsory insurance, like thirdpartymotor insurance.> Insurance brokingFSCS can pay compensation if:• you were mis-sold an insurance policyand lost money, or• you were a victim of fraud, and the brokerwho sold you the policy has gone bust andcannot return your premiums or moneyowed to you.The types of policies we cover include motor,home, pet, travel and payment protectioninsurance (PPI).Compensation limitWe can pay compensation of 90% of yourclaim with no upper limit. We protect in fullall compulsory insurance, like third-partymotor insurance.> Investment businessFSCS can pay compensation if you lose moneybecause of:• bad or misleading investment advice,• negligent management of investments,• misrepresentation, or• fraud, and the firm concerned has gonebust and cannot return your investmentsor money owed.We do not pay compensation if your investmentdoes not perform as well as you hoped.Compensation limitWe protect up to £50,000 per person perauthorised firm.6


Protecting your moneyWho can claim FSCS compensation?Individuals and small companies can claimcompensation from us. Larger companiesare generally excluded.How long would it take to getmy money back?In most cases for deposits, FSCS aimsto pay compensation within seven daysof a bank, building society or credit unionfailing. We will pay any remaining claims,which are likely to be more complex,within 20 working days.For other financial services products, wetry to resolve claims within six months.What does FSCS not cover?We do not cover some financial products.Here are some examples:• Money held on pre-paid credit cards.• Christmas or other savings clubs.• ‘Boiler room’ scam investments –‘products’ sold by unauthorisedfirms, often abroad, that defraudcustomers of their money.• Losses arising purely frominvestment performance.• Some electronic payment services(such as PayPal) or currency bureaux.• Insurance policies for marine,aviation or transport business.• Credit insurance or reinsurance.• Mortgage lending or administration.7


Find out moreThis leaflet explains how FSCS protects your money.For specific information about how this applies to yourindividual circumstances you should speak to yourfinancial services provider(s) or advisor.If you would like more information about FSCS,including how to make a claim, please visit our websiteat www.fscs.org.uk, or call us on 0800 678 1100.COPYRIGHT © FSCS. L01 06 2012

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