The front line of financial harm | FSCS
Context
FSCS Chief Executive Caroline Rainbird has written an article on the frontline of financial harm: the balance needed to support the varied stakeholders and the importance of reducing consumer harm.
Key points to note
- The FSCS provides a trusted compensation service that helps maintain public confidence in the financial services industry and is viewed as sitting at the front line of financial harm. When people have lost money, helping them get back on track is a FSCS priority.
- Although this article concentrates on consumers, the FSCS Chief Executive also highlights the careful balance to strike to support all their varied stakeholders – consumers, customers, levy-paying firms and the wider financial services industry. A FSCS report ‘The balancing act of compensation’ was recently published.
- A key priority for the FSCS is helping to reduce instances of consumer harm and financial advice plays an important part. When it comes to making financial decisions, consumers’ ability to access sound financial advice is crucial. FSCS data shows 78% of customer claims are currently linked to receiving poor financial advice.
- The article also highlights the pension compensation gap where money returned to customers is less than the total lost due to FSCS compensation limits. Where a firm has failed the FSCS limit is £85,000 per person, while the FOS limit for a firm still trading is £375,000. The FSCS believe this gap needs to be addressed.
- The FSCS Chief executive also talks about the importance of educating and empowering consumers.
Next actions
None – for information and awareness.