Autumn 2010

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Autumn 2010

The FSCS Consumer Awareness Programme

Briefing for managers of staff who communicate with customers


Contents

The purpose of FSCS

Working together to build customer confidence

The FSCS “badge of reassurance”

Timing plan


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 maybe 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


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)


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.


Why the FSCS programme is happening

Raising FSCS awareness &

understanding…… builds customer confidence & helps

build trust in the financial services

industry … … contributing to overall UK

financial stability


Supporting confidence in UK financial services


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


Our support of the FSCS activity helps contribute towards a balanced business

Shareholders Staff

CustomersSociety

Understanding of FSCS helps reassure customers, and overall helps contribute towards financial stability which is good for everyone


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


Likely customer journeys

Links through to a page on our website:

[www. … industry-player.co.uk … ]

Customer sees FSCS

ad or reads

article in the press or online

Customer may ask provider

FSCS website – customer

given some info & key questions

to ask providers if they want

more detail Customer may visit provider website

Customer is reassured,

and takes no further action


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

Example badge


Information support

This briefing

Frequently Asked Questions

Q&A engine on FSCS website

[ Customer literature ]

[ Our website – see … ]


Timing plan

Staff briefing [ …date ... ]

Point of sale & customer literature available [ … date … ]

Website [ … date … ]

FSCS customer awareness advertising starts: Jan 2011


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

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


AppendixBackground information on FSCS


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


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.


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.


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

Documents

Autumn 2010