Context
The FCA has published the feedback it received to its call for input on the framework for protection provided through the Financial Services Compensation Scheme (FSCS), following concerns about increasing costs.
Key points to note
The main theme from the feedback was for firms to improve their conduct, so there are fewer calls on the FSCS from mis-sold products by failed firms. Feedback also focused on the need for firms to be more financially resilient, to address the underlying causes of high redress liabilities.
For the next phase of the review, the FCA is planning to:
- Review compensation limits to consider whether they remain at an appropriate level for different types of claims
- Review funding class thresholds to consider whether the class thresholds remain at an appropriate level
- Carry out consumer and firm research, in conjunction with the FSCS, to improve the FCA’s understanding of the impact of FSCS protection on consumer decision making, confidence and behaviour, and on firm behaviour and incentives
Next actions
None – for information and awareness