A close relationship between the Financial Services Compensation Scheme and insolvency practitioners is critical when it comes to protecting consumers. The FSCS and the Bank of England are working hard to improve the communication with the insolvency practitioner community in several ways including the annual jointly hosted event for IPs.
Importance of closer ties
The FSCS is the official UK compensation scheme. They pay out compensation to clients if a firm is unable or likely to be unable to pay the claims against it. The scheme protects mortgages, deposits, insurance and investments taken out by customers if a firm was to fail. The chief executive of the FSCS, Mark Neale, highlighted the importance of a close bond. He said that the basis of the relationship is the provision of data. The FSCS relies on insolvency practitioners for accurate data regarding firms which end up in default and claims against them at the FSCS. The FSCS also utilises their relationship with insolvency experts to compensate consumers quickly and efficiently when they cannot otherwise access a failed firm’s own system. This was highlighted in the case studies of MF Global and Alpari. The FSCS could not obtain the data from the brokers, leading them to turn to insolvency practitioners to confirm customer’s balances. It has also been known for insolvency practitioners to assist the FSCS to identify vulnerable customers during several credit union failures. At The Insolvency Experts, we have an expert understanding of the best ways to protect you and your clients’ money.
Contact us for more information
To find out more about the importance of an insolvency practitioner in times of financial struggle, and to see how we can assist your company, contact one of our experts today. Contact us online, or call us to speak to a specialist directly on 0300 303 8284.