The Financial Services Compensation Scheme (FSCS) is a statutory fund of last resort established to settle claims, including those related to mortgages, pensions, bonds and investments, to an individual person or a small business when a company authorised by the Financial Services Authority is unable to pay their liabilities. A solicitor generally makes the application when the financial company concerned has either gone out of business, is in liquidation or is bankrupt. Solicitors claims can be made direct to the FSCS or when an unsatisfied authority for payment of compensation has been made by the Financial Ombudsman Service. The FSCS will generally not cover 100% of loss :-
The FSCS is independent from the FSA however it is accountable to the FSA and therefore ultimately accountable to the Treasury. The scheme, in common with the FSA is funded by the financial services industry. The FSCS derives its authority from the Financial Services and Markets Act 2000 and came into operation in 2001.
The Financial Services Compensation Scheme (FSCS) which became operational on 1 December 2001 is an independent body set up under the Financial Services and Markets Act 2000 and is a 'fund of last resort' which will pay compensation to consumers of financial products if a financial firm is unable to pay any claims made against it. The FSCS covers business conducted by firms authorised by the Financial Services Authority which regulates financial services in order to protect consumers. The FSCS covers these issues however solicitors claims are usually only made to the FSCS when the firm is 'in default' of payment of compensation following a recommendation from the Financial Ombudsman Services due usually as a result of insolvency. The FSCS aims to :-
In order to make a successful solicitors claim to the FSCS, the firm concerned must have been one authorised by the FSA and must subsequently have been one of over 30 firms now declared to be 'in default' by the FSA. Loretta Minghella the FSCS Chief Executive recently stated :-
Compensation claims should initially be the subject of a written or oral complaint containing the grounds for the application made directly to the firm that gave the advice if that firm is still trading. If the claim is not time barred and is not settled satisfactorily then an application can be made to the Financial Ombudsman Service and the matter may thereafter be referred to the FSCS who will settle claims both for individuals and for small business with an annual turnover of less than £1,000,000. There are certain complex regulations within the scheme which means the FSCS may not be able to cover the entire loss in an investment transaction.
The FSCS has a detailed complaints procedure for those individuals or firms that are unhappy with any decision. Any complaint is initially passed to a manager for investigation unless that manager was involved in the initial problem in which case the complaint will be investigated by an alternative person of similar status. If the complaint is about a manager it will be investigated by the Chief Executive and if the complaint is about the Chief Executive it will be referred to the Chairman to deal with at his discretion. Upon receipt of a complaint the FSCS must acknowledge receipt within three working days. Within ten working days a manager at the FSCS must write to the complainant advising the result of the investigations however if the investigations are likely to take longer than ten days then the complainant must be updated every ten days until the investigation is completed. If the complainant is not satisfied with the outcome and conclusions of the investigation the matter is referred to the Chief Executive for review and thereafter the matter may be referred to an Independent Investigator.
Our solicitors deal with compensation claims for investment bonds, mortgages and pensions. Why not get expert support to improve your chances of securing the maximum compensation you deserve using our no win no fee* service? We call upon experienced lawyers, accountants and actuaries to assist our claims team and can advise at an early stage on the prospects of recovery of compensation. If you would like free advice on our no win no fee* compensation scheme just complete and send the contact form or call the helpline and an experienced financial claims adviser will discuss your potential claim at no cost and with no further obligation.SOLICITORS HELPLINE: ☎ 0344 414 0017