Savings Compensation Speeded Up by FSA
Friday, January 9, 2009 15:31
According to chief executive of the Financial Services Authority—Hector Sants, experience has highlighted how essential compensation is and that it is imperative consumers understand that they will be reimbursed if a bank, building society or credit union fails. The current scheme has worked well in unprecedented times, compensating hundreds of thousands of savers in a matter of weeks. However consultation paper seeks to learn the lessons from those events to produce an even better system. It is recognised that to help underpin confidence in the banking system consumers.
Currently, claims with the Financial Services Compensation Scheme, which came under scrutiny after the failure of Icesave and Kaupthing Edge, can take up to 6 weeks to process.
Under plans from the City watchdog of upgrading computer systems to facilitate faster pay-outs, now the savers could receive compensation within 7 days when a bank collapse. Savers are contacted by the liquidator or FSCS and sent application forms to claim compensation if a bank goes bust.
Besides, the FSA published a proposal yesterday. If it is implemented, outstanding mortgage, credit card or loan debts with the same institution would no longer deducted from payments.
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