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MSE News: Banks told to display clear FSCS savings protection info

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MSE News: Banks told to display clear FSCS savings protection info

edited 30 November -1 at 1:00AM in Savings & Investments
8 replies 2.1K views
Former_MSE_HelenFormer_MSE_Helen
2.4K posts
edited 30 November -1 at 1:00AM in Savings & Investments
"Banks will soon be made to show clearer info on how much compensation savers could claim if a provider went bust ..."

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  • ConsumeristConsumerist Forumite
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    Neale says:
    "The banking crisis shows how important it is for consumers to have clear information about FSCS protection. We never again want to witness the run on a bank because people do not know their money is protected.
    "This is essential to building consumer confidence, and is not limited to deposits. It is something that is normal in other parts of the world."
    So it's not so much for consumer protection but more for the banks' self interest. Some things will never change.

    A welcome move, nonetheless.
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • innovateinnovate
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    Are you over-analysing what he said? A run on banks is obviously unpleasant for the banks, but at least as unpleasant for depositors, too!

    I think it's good for consumers if they get equipped with factual information that should stop them from worrying unneccessarily, and from irrational actions such as pulling money out of perfectly safe bank accounts. There are still many people who haven't yet heard of the FSCS protection limit at all - you see them popping up now and then on the forum. Putting the information "in their face" hopefully helps in educating the masses.

    The new approach should also be particularly good for those consumers who read mostly tabloids, because all the papers - - for once - - should all be able to report based on facts, rather than making up some balderdash (like the Daily Mail did just the other day in response to the Moody's downgrade of spanish banks).
  • ConsumeristConsumerist Forumite
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    innovate wrote: »
    Are you over-analysing what he said?
    No but I think you might be over-analysing what I said. ;)
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • oldvicaroldvicar Forumite
    1.1K posts
    mse wrote:
    How will info be displayed?
    ...
    If they have a branch network they must display posters on the front window, at the cashiers' desks and somewhere else.

    I suppose banks will be installing bigger windows to accommodate these posters.

    My local Nationwide branch is small and has room for two posters in its front window which it currently uses to advertise its latest accounts. It is really useful to see these as you walk down the high street as a quick check on whether you are getting the best deal or if something new beats it. Both these spaces will have to be used for FSCS protection posters (in the plural) instead? All the other banks in town will have almost identical posters too - it will all look very samey. In addition to the cashiers' window, there is room inside the branch for just one further poster, opposite the entrance door. Currently they use it to display the interest rates on more or less the full range of their accounts. Guess that will have to go too.

    The FSA has prescribed the wording to be used, as below. MSE had beter write an article to explain to people what an "eligible deposit" is.
    fsa wrote:
    The following wording has been prescribed by the FSA.




    UK and non-EEA banks (including EEA subsidiaries):
    • For deposit takers with a single brand/ trading name
    Your eligible deposits with [insert name of firm] are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit protection scheme. Any deposits you hold above the £85,000 limit are not covered.
    • For deposit takers with multiple brands/ trading names:
    Your eligible deposits with [insert name of firm] are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit protection scheme. This limit is applied to the total of any deposits you have with the following: [insert names of brands as appropriate]. Any total deposits you hold above the £85,000 limit between these brands are not covered.
    • Optional wording for Credit Unions with a single brand/ trading name:
    “Your eligible deposits are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit protection scheme. Any deposits you hold above the £85,000 limit are not covered.



    UK branches of EEA banks:
    • Single brand/ trading name banks
    “Your eligible deposits with [insert name of firm] are protected up to a total of 100,000 euro by [insert name of compensation scheme] the [insert home state of scheme] deposit protection scheme and are not protected by the UK Financial Services Compensation Scheme. Any deposits you hold above the 100,000 euro limit are not covered.
    • Multiple brands/ trading names Banks:
    “Your eligible deposits with [insert name of firm] are protected up to a total of 100,000 euro by [insert name of compensation scheme] the [insert home state of scheme] deposit protection scheme and are not protected by the UK Financial Services Compensation Scheme. This limit is applied to the total of any deposits you have with the following: [insert names of brands as appropriate]. Any total deposits above the 100,000 euro limit are not covered.
  • Waste of time and effort. It will be as effective as "your home is at risk ..." messages on mortgage advertising. I'm yet to meet anybody who decided not to get a mortgage as a result.

    Building on Oldvicar's approach I pulled the message below from the Halifax web site. It also appears on the back of every statement I get.

    I'm sure people up and down the country are reading every word.

    It's also overkill. Only 2% of the population have over £85k in cash. More cost for banks to pass on indirectly to consumers.

    ----

    Important information about compensation arrangements
    We are covered by the Financial Services Compensation Scheme (FSCS).! The FSCS can pay compensation to depositors if a bank is unable to meet its financial obligations.! Most depositors - including most individuals and small businesses - are covered by the scheme.

    In respect of deposits, an eligible depositor is entitled to claim up to £85,000.! For joint accounts each account holder is treated as having a claim in respect of their share so, for a joint account held by two eligible depositors, the maximum amount that could be claimed would be £85,000 each (making a total of!£170,000).! The £85,000 limit relates to the combined amount in all the eligible depositor's accounts with the bank including their share of any joint account, and not to each separate account.

    For further information about the scheme (including the amounts covered and eligibility to claim) please ask at your local branch, refer to the FSCS website https://www.FSCS.org.uk or call 020 7741!4100 or 0800 678 1100.

    Deposits with us are held with Bank of Scotland plc.! Accounts with Bank of Scotland plc include accounts with its divisions and trading names: Halifax, Intelligent Finance (IF), Birmingham Midshires (BM Savings), Bank of Scotland, Bank of Scotland Private Banking, Bank of Scotland Germany, Bank of Scotland The Netherlands, Bank of Scotland Treasury,!Lloyds Bank Corporate Markets, Lloyds TSB Corporate Markets and!St. James’s Place Bank.!!Some savings accounts under the AA Savings, Saga and Charities Aid Foundation brand names are also deposits with Bank of Scotland plc.! An eligible depositor’s £85,000 limit relates to the combined amount in accounts under all of these names.

    If you are unsure whether your account is held with Bank of Scotland!plc please check your account literature.

    For more information please click here.
  • ConsumeristConsumerist Forumite
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    opinions4u wrote: »
    I pulled the message below from the Halifax web site. . .
    How easy was it to find on the website?
    . . . It also appears on the back of every statement I get.
    So, after having deposits at risk for, perhaps, a year.
    Only 2% of the population have over £85k in cash.
    If you say so. But house movers, for example, may have considerably more on deposit for short periods.
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • jimjamesjimjames Forumite
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    How easy was it to find on the website?
    So, after having deposits at risk for, perhaps, a year.
    If you say so. But house movers, for example, may have considerably more on deposit for short periods.

    I would suggest that the number of house movers affected is considerably less than 2%. I've moved house 4 times and have never had more than £85k in the bank as a result as the sale and purchase happen simultaneously in most cases - or do you mean held at solicitors on your behalf?
    Remember the saying: if it looks too good to be true it almost certainly is.
  • ConsumeristConsumerist Forumite
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    jimjames wrote: »
    I would suggest that the number of house movers affected is considerably less than 2%. . .
    Does it really matter why large amounts may be on deposit for short periods? Does it really matter that few people are involved?

    It just seems reasonable to me, as someone who is not in the financial services industry, that banks should make it clear when their various brands share the same licence for compensation purposes.

    Is that so unreasonable to you?
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
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