Fidor "bank"

System

Whats the big deal with using the German FOS? They all have a similar remit as they are the product of the same EU legislation.

Part of the issue with the trace will be all players involved - Metro uses Barclays for it's clearing, Fidor uses a 3rd party who themselves use HSBC.

Anthorn

ChiefGrasscutter wrote: »

I specifically warned about this German aspect to any complaints in this Fidor thread (post 19) .....
https://forums.moneysavingexpert.com/discussion/5326818
I was replied to in post 21 that I was wrong and people could use the UK's procedures to make complaints.
Ah well......

The problem if I may call it that, is that Fidor UK is regulated in/by the UK so it should come under the control of the FCA and FOS in much the same way as for example, Santander UK and TSB both of which are Spanish. If it doesn't there is not much point in it being UK regulated apart from the ability to enforce UK law.

antrobus

Anthorn wrote: »

The problem if I may call it that, is that Fidor UK is regulated in/by the UK so it should come under the control of the FCA and FOS in much the same way as for example, Santander UK and TSB both of which are Spanish. If it doesn't there is not much point in it being UK regulated apart from the ability to enforce UK law.

No.

Santander UK Plc is a UK bank. TSB Plc is a UK bank. They might well be 100% owned by non-UK entities, but they are still UK banks, and therefore PRA regulated and all that, and definitely not Spanish banks.

Fidor Bank AG is a German bank, operating in the UK under the the EEA passport, and is regulated by the Bundesbank, with complaints being dealt with by their arbitration board. It is not subject to UK regulation etc and so forth.

masonic

Heng_Leng wrote: »

Whats the big deal with using the German FOS? They all have a similar remit as they are the product of the same EU legislation.

As long as you have verified that the relevant protections and procedures are equivalent, then it might not be a big deal. But I doubt many of Fidor UK's customers have done so. It would be naive to simply assume they are the same because they are, in part, the product of some common EU legislation.

The main issue with a bank like Fidor is lack of FSCS protection. Relying on a foreign compensation scheme is an unnecessary risk in my view.

Anthorn

masonic wrote: »

As long as you have verified that the relevant protections and procedures are equivalent, then it might not be a big deal. But I doubt many of Fidor UK's customers have done so. It would be naive to simply assume they are the same because they are, in part, the product of some common EU legislation.

The main issue with a bank like Fidor is lack of FSCS protection. Relying on a foreign compensation scheme is an unnecessary risk in my view.

I agree in part. Compensation is compensation and it doesn't really matter where it comes from. But there is a common thread running through these discussions that if it's not FSCS it must be inferior and risky. That is simply not true: Are we to regard the Bundesbank for example as inferior?

On a related subject, I'd say that with the relaxation of regulation UK banking is about to become a minefield. I think I'll switch my current account to Lloyds. At least it's British ... or is it?
http://www.thisismoney.co.uk/money/saving/article-2606119/FCA-reveals-29-firms-lodged-banking-licence-applications.html

masonic

Anthorn wrote: »

I agree in part. Compensation is compensation and it doesn't really matter where it comes from. But there is a common thread running through these discussions that if it's not FSCS it must be inferior and risky. That is simply not true: Are we to regard the Bundesbank for example as inferior?

It is not the lack of capability of a compensation scheme to pay out that is most concerning. It is the lack of motivation for a compensation scheme to bail out what amounts to a bunch of foreigners at a time when German citizens may feel the money should be used to help out with its domestic problems (and it may well have some issues if the compensation scheme is being invoked).

Remember that the German compensation scheme has absolutely zero track record in compensating UK savers, whereas the FSCS has been called upon to reimburse UK citizens on several occasions and has never failed in that duty.

There has only been one occasion where a 'passport' compensation scheme was triggered to compensate UK savers and that ended in the country in question choosing to protect its own citizens, but not those of other EU nations, and the UK Government having to step in. Whether or not the UK Government would do so again for a non-UK regulated bank is questionable, so that is a risk - and an unnecessary one to take.

Anthorn

masonic wrote: »

It is not the lack of capability of a compensation scheme to pay out that is most concerning. It is the lack of motivation for a compensation scheme to bail out what amounts to a bunch of foreigners at a time when German citizens may feel the money should be used to help out with its domestic problems (and it may well have some issues if the compensation scheme is being invoked).

Remember that the German compensation scheme has absolutely zero track record in compensating UK savers, whereas the FSCS has been called upon to reimburse UK citizens on several occasions and has never failed in that duty.

There has only been one occasion where a 'passport' compensation scheme was triggered to compensate UK savers and that ended in the country in question choosing to protect its own citizens, but not those of other EU nations, and the UK Government having to step in. Whether or not the UK Government would do so again for a non-UK regulated bank is questionable, so that is a risk - and an unnecessary one to take.

So where exactly is your evidence that the German compensation scheme has failed? By the look of it you don't even know what it's called.

There is in some quarters a somewhat justified appraisal on the FSCS based on the events of 2007/8 that the FSCS will never be used and failed banks will simply be taken over by the government and Bank of England.

colsten

Anthorn wrote: »

So where exactly is your evidence that the German compensation scheme has failed? By the look of it you don't even know what it's called.

You seem to have completely missed the point of masonic's post.

Anthorn wrote: »

There is in some quarters a somewhat justified appraisal on the FSCS based on the events of 2007/8 that the FSCS will never be used and failed banks will simply be taken over by the government and Bank of England.

The FSCS is being used all the time and has paid out hundreds of millions. Less than a year ago, a whole lot of MSE Forum members had FSCS payments for a failed credit union.

masonic

Anthorn wrote: »

So where exactly is your evidence that the German compensation scheme has failed? By the look of it you don't even know what it's called.

I made no such claim. The claim I did make is right there in black and white if you would care to read it. The scheme on which UK savers rely when a bank within the EEA is not part of the FSCS is commonly known as the passport scheme. There is little point in learning what each EEA member state calls their version - knowing the name won't make you any safer. The fact remains, those relying on this scheme are relying on something with absolutely zero track record in compensating UK savers when they could instead save their money with an institution that offers protection that has been proven.

Anthorn

masonic wrote: »

I made no such claim. The claim I did make is right there in black and white if you would care to read it. The scheme on which UK savers rely when a bank within the EEA is not part of the FSCS is commonly known as the passport scheme. There is little point in learning what each EEA member state calls their version - knowing the name won't make you any safer. The fact remains, those relying on this scheme are relying on something with absolutely zero track record in compensating UK savers when they could instead save their money with an institution that offers protection that has been proven.

Again where is your evidence? It just comes across to me as unsubstantiated drivel.

The evidence to support my claim that in the event that a bank goes down it will be taken over by the government and bank of england is a matter of public record.

All I have from this thread so far is that these non-UK banks are just "a bunch of foreigners" who cannot be trusted. Hardly ideal.