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Autumn 2010

The FSCS Consumer Awareness Programme. Briefing for managers of staff who communicate with customers. Autumn 2010. The purpose of FSCS Working together to build customer confidence The FSCS “badge of reassurance” Timing plan. Contents. FSCS purpose.

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Autumn 2010

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  1. The FSCS Consumer Awareness Programme Briefing for managers of staff who communicate with customers Autumn 2010

  2. The purpose of FSCS Working together to build customer confidence The FSCS “badge of reassurance” Timing plan Contents

  3. FSCS purpose • The FSCS is part of the UK’s financial ‘safety net’ which contributes to consumer confidence • If an FSA authorised firm becomes insolvent or ceases trading the FSCS maybe able to pay compensation to a firms customers, subject to limits • The FSCS is independent of the government and the financial services industry, and was set up under the Financial Services and Markets Act 2000 • The FSCS does not charge individual consumers for using its service

  4. What FSCS covers • Business conducted by firms authorised by FSA • Business covered • Deposits • Insurance policies • Advice about and arranging general insurance products (for business on or after 14 January 2005) • Investment business • Home Finance advice and arranging e.g. arranging mortgages (for business on or after 31 October 2004)

  5. Limits to compensation • Deposits: from the 31 December 2010 the limit will be €100,000 per person per authorised firm (£85,000)* • Insurance Business: 90% of the claim with no upper limit. Compulsory insurance is protected 100% • General insurance advice and arranging (for business conducted on or after 14 January 2005): 90% of the claim with no upper limit. Compulsory insurance is protected 100% • Investment: £50,000 • Home finance mortgage advice and arranging: £50,000 * The current limit for Deposits is £50,000. The FSA is currently consulting on £85,000 as the sterling equivalent of €100,000. However, if the exchange rate moves materially to the consumer’s disadvantage, before the final rules are made in December 2010, the limit may be revised.

  6. Why the FSCS programme is happening Raising FSCS awareness & understanding… … builds customer confidence & helps build trust in the financial services industry … … contributing to overall UK financial stability

  7. Supporting confidence in UK financial services Industry player logo FSCS and … [FS firm] … are working together to ensure all UK customers are aware of the Compensation Scheme. The programme has the full backing of the Authorities

  8. Our support of the FSCS activity helps contribute towards a balanced business Shareholders Staff Society Customers • Understanding of FSCS helps reassure customers, and overall helps contribute towards financial stability which is good for everyone

  9. Getting the information to customers to restore confidence • FSCS will commence a mass-communication programme involving TV, Press, PR and Online starting Jan 2011 • Uses animation developed by the same people who created Wallace & Grommet and Chicken Run - this ensures information gets through to customers in the right way • Clear call-to-action: visit FSCS.org.uk or ask your provider

  10. Likely customer journeys Customer is reassured, and takes no further action FSCS website – customer given some info & key questions to ask providers if they want more detail • Links through to a page on our website: [www. … industry-player.co.uk … ] Customer sees FSCS ad or reads article in the press or online Customer may ask provider Customer may visit provider website

  11. FSCS badge for use by industry • To ensure a smooth customer journey from the FSCS advertising to financial services providers, helping build confidence • Longer-term aim is for the FSCS badge to be widely understood by the vast majority of customers of financial services in the UK • The sign prompts consumers to ask the FSCS for more information about their cover • A useful “badge” of reassurance for customers Example badge

  12. Information support • This briefing • Frequently Asked Questions • Q&A engine on FSCS website • [ Customer literature ] • [ Our website – see … ]

  13. Timing plan • Staff briefing [ …date ... ] • Point of sale & customer literature available [ … date … ] • Website [ … date … ] • FSCS customer awareness advertising starts: Jan 2011

  14. What to do next • Try and answer customer questions as per Q&A briefing as this helps build customer confidence • Review the existing Q&As for consumer facing staff • Any complex questions should be referred to [ … within industry player …. ]

  15. Conclusions • Raising awareness and understanding of FSCS builds consumer confidence • The authorities are behind the FSCS consumer awareness programme as it will help to contribute to financial stability • The FSCS programme starts in January 2011 • Financial industry firms will be supporting the programme by ensuring their staff are trained to answer questions and their customers are aware of the cover the FSCS provides

  16. AppendixBackground information on FSCS

  17. FSCS contact details • Website www.fscs.org.uk • FSCS helpline 020 7892 7300 or 0800 678 1100 • Address Financial Services Compensation Scheme 7th Floor, Lloyds Chambers 1 Portsoken Street London E1 8BN

  18. Description of FSCS for customers • The Financial Services Compensation Scheme (FSCS) is the independent body, set up by government, funded by financial services firms which gives you your money back if your authorised financial services provider goes bust. • The FSCS protects a range of products for both individuals and small businesses. Limits apply depending on the product you have bought. The FSCS does not charge individual consumers for using its service. The FSCS cannot help you if the firm you have done business with is still trading.

  19. The overall regulatory framework • FSA regulates the UK's financial services industry • The Financial Ombudsman Service resolves consumer disputes against ‘live’ companies and can make awards • FSCS protects consumers when firms go bust and acts as the Scheme manager • FSA sets most of the rules for the Financial Ombudsman Scheme and must consult publicly before setting rules • FSA sets the rules for FSCS and must consult publicly before setting the rules • The FSA is not involved in how the FSCS and the Financial Ombudsman are run. It does not look into complaints about firms from individual consumers. And it cannot influence or change decisions that the Financial Ombudsman Service and the FSCS make in individual cases.

  20. Structure of FSCS funding • Paid for by firms through levies for management expenses and compensation payments • Annual levy includes anticipated compensation costs in next 12 months • Funding arrangements changed on 1 April 2008 to: • Five classes – deposits, investment, life and pensions, general insurance and home finance • Two sub-classes in each broad class - provider and distributor lines (with the exception of the deposits class) • Funding under review following banking crisis and European Commission proposals

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