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FSCS refunds £473m to customers of failed firms

Redwan Eid | Jun. 28, 2019
FSCS refunds £473m to customers of failed firms

June 28, 2019 | AtoZ Markets - The UK Financial Services Compensation Scheme (FSCS) has announced its plan, in which paid £473 million in compensation to 425,760 customers of failed firms during 2018/19.

What was mentioned in its annual report published on June 27, is that the aforementioned with the £405 million FSCS paid in compensation in the previous year.

Levies were raised on 49,224 regulated financial services firms, as the FSCS’s Report reveals, especially to cover the compensation funds needed for the scheme.

Variant figures were mentioned in the report, where the FSCS recovered £4.7 billion from Bradford & Bingley, to pay off the debts from HM Treasury provided for the 2008/09 banking failures.

That required another £26 million to be recovered from other failures; and FSCS continued to monitor and pursue other available recovery opportunities.

As a result of FSCS paying £123 million in compensation, with £11 million higher than in 2017/18, subsequently, SIPP related claims kept rising.

“As we continue to see a rise in SIPP related claims we are working with our partners in industry through our Prevent pillar to gain valuable insight into the causes of firm failures and about the directors and advisors involved in mis-selling.” Mentioned the report.

FSCS thrives to prevent future failures and restores consumer’s confidence

On her turn, Caroline Rainbird, FSCS’s Chief Executive, said: “We recognise that we were only able to pay compensation to so many thousands of people because of the firms who paid our levy, and the diligent work of FSCS staff who successfully pursued recoveries from the estates of failed firms. Our customers, the wider financial services industry and consumers, are always central to our decision-making process.

“As an important part of our work is to help to both prevent future failures and restore consumer confidence in the financial services industry we introduced our strategy, FSCS into the 2020s: Protecting the Future. It identifies the challenges of the coming decade, and our priorities in meeting those challenges, as it focusses on four pillars: Prepare, Protect, Promote and Prevent.

“As we continue to see a rise in SIPP related claims we are working with our partners in industry through our Prevent pillar to gain valuable insight into the causes of firm failures and about the directors and advisors involved in mis-selling.”, included the report as well.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.