The FSCS Consumer Awareness
Programme
Briefing for managers of staff who
communicate with customers
Autumn 2010
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Contents

The purpose of FSCS

Working together to build customer confidence

The FSCS “badge of reassurance”

Timing plan
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FSCS purpose

The FSCS is part of the UK’s financial ‘safety net’ which
contributes to consumer confidence

If an FSA authorised firm becomes insolvent or ceases
trading the FSCS may be able to pay compensation to a
firms’ customers, subject to limits

The FSCS is independent of the government and the
financial services industry, and was set up under the
Financial Services and Markets Act 2000

The FSCS does not charge individual consumers for using its
service
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What FSCS covers

Business conducted by firms authorised by FSA

Business covered
 Deposits
 Insurance policies
 Advice about and arranging general insurance products (for
business on or after 14 January 2005)
 Investment business
 Home Finance advice and arranging e.g. arranging
mortgages (for business on or after 31 October 2004)
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Limits to compensation

Deposits: from the 31 December 2010 the limit will be €100,000 per
person per authorised firm (£85,000)*

Insurance Business: 90% of the claim with no upper limit. Compulsory
insurance is protected 100%

General insurance advice and arranging (for business conducted on or
after 14 January 2005): 90% of the claim with no upper limit. Compulsory
insurance is protected 100%

Investment: £50,000

Home finance mortgage advice and arranging: £50,000
* The current limit for Deposits is £50,000. The FSA is currently consulting on £85,000 as the sterling equivalent
of €100,000. However, if the exchange rate moves materially to the consumer’s disadvantage, before the final
rules are made in December 2010, the limit may be revised.
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Why the FSCS programme is happening
Raising FSCS
awareness &
understanding…
… builds customer
confidence & helps
build trust in the
financial services
industry …
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… contributing
to overall UK
financial
stability
Supporting confidence in UK
financial services
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FSCS and … [FS firm] … are working together to ensure all
UK customers are aware of the Compensation Scheme. The
programme has the full backing of the Authorities
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Our support of the FSCS activity helps
contribute towards a balanced business

Shareholders
Staff
Society
Customers
Understanding of FSCS helps reassure customers, and overall
helps contribute towards financial stability which is good for
everyone
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Getting the information to customers
to restore confidence

FSCS will commence a mass-communication programme
involving TV, Press, PR and Online starting Jan 2011

Uses animation developed by the same people who created
Wallace & Grommet and Chicken Run - this ensures information
gets through to customers in the right way

Clear call-to-action: visit FSCS.org.uk or ask your provider
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Likely customer journeys
Customer
sees FSCS
ad or
reads
article in
the press
or online
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FSCS
website –
customer
given some
info & key
questions
to ask
providers if
they want
more detail
Customer is
reassured,
and takes no
further action

Customer
may ask
provider
Customer
may visit
provider
website
Links through to a
page on our
website:
[www. … industryplayer.co.uk … ]
FSCS badge for use by industry

To ensure a smooth customer journey from the FSCS advertising to
financial services providers, helping build confidence

Longer-term aim is for the FSCS badge to be widely understood by the
vast majority of customers of financial services in the UK

The sign prompts consumers to ask the FSCS for more information
about their cover

A useful “badge” of reassurance for customers
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Example badge
Information support

This briefing

Frequently Asked Questions

Q&A engine on FSCS website

[ Customer literature ]

[ Our website – see … ]
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Timing plan

Staff briefing [ …date ... ]

Point of sale & customer literature available [ … date … ]

Website [ … date … ]

FSCS customer awareness advertising starts: Jan 2011
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What to do next

Try and answer customer questions as per Q&A briefing as
this helps build customer confidence

Review the existing Q&As for consumer facing staff

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Any complex questions should be referred to [ … within
industry player …. ]
Conclusions

Raising awareness and understanding of FSCS builds
consumer confidence

The authorities are behind the FSCS consumer awareness
programme as it will help to contribute to financial stability

The FSCS programme starts in January 2011

Financial industry firms will be supporting the programme by
ensuring their staff are trained to answer questions and their
customers are aware of the cover the FSCS provides
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Appendix
Background information on FSCS
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FSCS contact details

Website www.fscs.org.uk

FSCS helpline 020 7892 7300 or 0800 678 1100

Address
Financial Services Compensation Scheme
7th Floor, Lloyds Chambers
1 Portsoken Street
London
E1 8BN
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Description of FSCS for customers

The Financial Services Compensation Scheme (FSCS) is the
independent body, set up by government, funded by financial
services firms which gives you your money back if your
authorised financial services provider goes bust.

The FSCS protects a range of products for both individuals and
small businesses. Limits apply depending on the product you
have bought. The FSCS does not charge individual consumers
for using its service. The FSCS cannot help you if the firm you
have done business with is still trading.
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The overall regulatory framework


FSA regulates the UK's financial services industry
The Financial Ombudsman Service resolves consumer disputes against ‘live’
companies and can make awards

FSCS protects consumers when firms go bust and acts as the Scheme manager

FSA sets most of the rules for the Financial Ombudsman Scheme and must
consult publicly before setting rules

FSA sets the rules for FSCS and must consult publicly before setting the rules

The FSA is not involved in how the FSCS and the Financial Ombudsman are
run. It does not look into complaints about firms from individual consumers. And
it cannot influence or change decisions that the Financial Ombudsman Service
and the FSCS make in individual cases.
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Structure of FSCS funding




Paid for by firms through levies for management expenses and
compensation payments
Annual levy includes anticipated compensation costs in next 12
months
Funding arrangements changed on 1 April 2008 to:
 Five classes – deposits, investment, life and pensions,
general insurance and home finance
 Two sub-classes in each broad class - provider and
distributor lines (with the exception of the deposits class)
Funding under review following banking crisis and European
Commission proposals
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