Consumers could claim up to £48,000 after FSCS steps in

Consumers can claim compensation of up to £48,000 if they have lost money as a result of their dealings with any one of 35 firms that the Financial Services Compensation Scheme (FSCS) has recently declared in default.

FSCS is the UK’s statutory compensation scheme for customers of regulated financial services firms.

It provides a free service to consumers.

Declaring a firm in default is the final part of a process in which a firm regulated by the Financial Services Authority (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 make a claim for compensation to FSCS.

"FSCS aims to provide an effective and efficient compensation service for consumers, and helps maintain confidence in the financial services sector," says Jonathan Clark, Director of Claims. “It is important that we let consumers of the 35 firms know that FSCS may be able to help if they have lost money and the firm can’t pay.”

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).

The kinds of investment claims FSCS handles usually relate to advice. For example, if somebody has been advised to buy an investment product such as an endowment policy, but it was unsuitable for them and they have lost money as a result of the advice they received.

For more information, visit fscs.org.uk.