FSCS

DullGreyGuy

boingy said:

DullGreyGuy said:

boingy said:

DullGreyGuy said:

boingy said:

I've said it in another thread but I do think that the protection should be per brand name rather than per licence. Customers shouldn't have to research whether banks are in the same group and whether that group has more than one licence.

But the protection is created by fees paid for the license and levies charged. You want to change the rules to per "brand" (and you'll have to be clear what counts as a different brand) then you also need to change the charging model so that the fund has enough monies for when a single license, multi-brand company fails. 

Maybe it should be one licence per brand. It's just that the present system puts the onus on customers to figure it out and this thread is a perfect illustration of the confusion that causes. Folks will only find out they are not as covered as they thought when it all goes wrong.

It would fly in the face of years of consolidation and reduction in regulated entities which reduces costs. 

The problem is that the PRA cannot come in and deal with just a brand and not the whole company. Capital calculations, asset ownership etc has to be done at a company level, anything to brand is a somewhat arbitrary split/allocation. They couldn't put one brand into special measures whilst leaving the other brands unimpacted. 

If we were to change the FSCS protection to simply be £150k protection per person rather than per person per entity I very much doubt it would drive banks to take on high risk strategies or customers to double their investment in such products. It'd be easier to strip the per bank aspect and just increase the limit. 

Some of you folks will argue against anything, just for the sake of it. 

Some of us work in the industry and have to deal with the issues, unintended consequences etc of half thought out ideas 

masonic

boingy said:

DullGreyGuy said:

boingy said:

I've said it in another thread but I do think that the protection should be per brand name rather than per licence. Customers shouldn't have to research whether banks are in the same group and whether that group has more than one licence.

But the protection is created by fees paid for the license and levies charged. You want to change the rules to per "brand" (and you'll have to be clear what counts as a different brand) then you also need to change the charging model so that the fund has enough monies for when a single license, multi-brand company fails. 

Maybe it should be one licence per brand. It's just that the present system puts the onus on customers to figure it out and this thread is a perfect illustration of the confusion that causes. Folks will only find out they are not as covered as they thought when it all goes wrong.

Perhaps the FCA should make all financial institutions provide customers with a FSCS Information Sheet detailing the name of the licenced bank during account application and annually thereafter.

spider42

boingy said:

Customers shouldn't have to research whether banks are in the same group and whether that group has more than one licence. Folks will only find out they are not as covered as they thought when it all goes wrong.

Which brands are covered under the same licence is made very obvious to those who bother to read the FSCS sheet which banks and building societies always provide you with when opening a new account. In my experience, you have to tick a box to confirm that you've been provided with this, and read it, when opening a new account online, and I assume similar would apply if applying in branch (although I've not done that for over a decade!).

No "research" is necessary - the bank literally tells you everything you need to know before you've opened the account. And it is the first piece of information provided on the sheet - it isn't buried in the small print. FSCS rules also require banks and building societies to provide a further copy of their FSCS sheet to depositors on an annual basis too.

E.g. NatWest says: "Limit of protection: £85,000 per depositor per bank/building society/credit union. The following trading names are part of your bank/building society/credit union: National Westminster Bank Plc, NatWest Premier, Ulster Bank and Mettle."

RBS says: "Limit of protection: £85,000 per depositor per bank/building society/credit union. The following trading names are part of your bank/building society/credit union: Drummonds, Child & Co, Holts and The One Account."

Halifax says: "Limit of protection: £85,000 per depositor per bank. The following trading names are part of your bank: Halifax, Intelligent Finance (IF), Birmingham Midshires (BM Savings), Bank of Scotland, Bank of Scotland Private Banking and Bank of Wales."

Lloyds says: "Limit of protection: £85,000 per depositor per bank. The following trading names are part of your bank: Lloyds Bank, Mayfair Private Banking, Lloyds Bank Private Banking and Scottish Widows Bank. Some savings accounts under the Charities Aid Foundation brand name are also deposits with Lloyds Bank plc."

spider42

masonic said:
Perhaps the FCA should make all financial institutions provide customers with a FSCS Information Sheet detailing the name of the licenced bank during account application and annually thereafter.

They already do?

From https://www.fscs.org.uk/globalassets/industry-resources/research/fscs-consumer-research-september-2022.pdf

In addition, the PRA requires all authorised banks, building societies and credit unions to inform new and existing customers that FSCS protects their deposits, both when opening new accounts, and at least once a year – using an information sheet. Deposit takers must prominently feature FSCS materials using stickers, posters and leaflets in branch.

Beddie

spider42 said:

masonic said:
Perhaps the FCA should make all financial institutions provide customers with a FSCS Information Sheet detailing the name of the licenced bank during account application and annually thereafter.

They already do?

From https://www.fscs.org.uk/globalassets/industry-resources/research/fscs-consumer-research-september-2022.pdf

In addition, the PRA requires all authorised banks, building societies and credit unions to inform new and existing customers that FSCS protects their deposits, both when opening new accounts, and at least once a year – using an information sheet. Deposit takers must prominently feature FSCS materials using stickers, posters and leaflets in branch.

He was attempting humour/irony

spider42

Beddie said:

spider42 said:

masonic said:
Perhaps the FCA should make all financial institutions provide customers with a FSCS Information Sheet detailing the name of the licenced bank during account application and annually thereafter.

They already do?

From https://www.fscs.org.uk/globalassets/industry-resources/research/fscs-consumer-research-september-2022.pdf

In addition, the PRA requires all authorised banks, building societies and credit unions to inform new and existing customers that FSCS protects their deposits, both when opening new accounts, and at least once a year – using an information sheet. Deposit takers must prominently feature FSCS materials using stickers, posters and leaflets in branch.

He was attempting humour/irony

Oh, OK. I'm an accountant. We don't understand humour!