The lucky ones who can claim - and the victims left out in the cold

When a regulated financial firm is no longer trading or does not have the resources to pay claims itself, the scheme can then consider compensation. A claim is dependent on a client having lost through poor advice or mismanagement.

The maximum compensation depends on the kind of loss being claimed.

• Lost deposits if a bank, building society or credit union goes bust: the first £2,000 and 90% of the rest of the loss up to a top payment of £31,700.

• Investment and mortgage advice: the first £30,000 and 90 per cent of the next £20,000 up to a top payment of £48,000.

• Insurance policies: the first £2,000 and 90 per cent of the rest of a claim with no upper limit. Where the insurance is compulsory, third-party motor cover for example, claims are covered in full.

The scheme CANNOT...

• Pay claims when a business is still trading or the FSCS says owners are able to pay.

• Take legal action on behalf of customers against directors or company owners that can pay claims.

• Make additional payments for distress and suffering or punish companies. It cannot handle claims from businesses, except sole traders.

• Consider claims for investment or endowment advice given before August 28, 1988; mortgage advice before October 31, 2004; claims against insurance intermediaries before January 14, 2005.

Aug 5, 2005
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