View more on these topics

FSCS: Recoveries totalling £300m have cut industry levy

The Financial Services Compensation Scheme has recovered just under £300m from failed financial services firms since 2014.

The FSCS says the recovered funds have significantly reduced what advisers could have paid, despite the new £69m levy announced for this year last November.

In January the FSCS confirmed that mortgage brokers would pay £4m for 2019/20.

This is a significant fall from the £25m paid last year, due to brokers no longer having to contribute towards pensions and investment claims.

Also in January the FSCS declared four adviser firms in default.

Three of these were financial advisers and one a mortgage broker.

The companies were the Mortgage Matters Partnership, based in Cheshire, Montpelier Group Limited, based in the West Midlands, and Balfour Group Limited and Allan McRoberts, based in Edinburgh and Glasgow respectively

Around £20m has been recovered from court proceedings against a number of lenders for excessive commissions as part of payment protection insurance over the past five years.

More than £50m has also been recovered as a result of Keydata litigation in relation to multiple IFA firms’ misselling of Lifemark investments.

Neale says recoveries will be central to the FSCS’s new strategy for the 2020s as it looks to keep levies down.

FSCS general counsel James Derbyshire says this will include more complex procedures.

“The usual avenues of recovery we pursue include actions against the firms we’ve declared in default, and their PI insurers. Increasingly, however, we are taking ever more complex recoveries action, and in those instances we tend to make use of our panel of law firms, who have both the expertise and jurisdictional reach to assist us.”

A new five-year business plan for the lifeboat fund is expected to be finalised before Neale’s departure in May.

Neale says: “I am very proud of the professionalism of our recoveries team in navigating complex cases to successful outcomes.”

A £20bn Government loan the FSCS to cover claims relating to the banking failures during the Global Financial Crisis in 2008 has now also been repaid.

Recommended

FSCS-office-alt-500x320.jpg

FSCS declares four firms in default

The Financial Services Compensation Scheme has listed four financial services firms as insolvent during January. Three of these were financial advisers and one a mortgage adviser. The companies were the Mortgage Matters Partnership, based in Cheshire, Montpelier Group Limited, based in the West Midlands, and Balfour Group Limited and Allan McRoberts, based in Edinburgh and […]

FSCS Interior 480

FSCS broker levy set at £4m

The Financial Services Compensation Scheme has announced that £5m will be levied on home finance intermediaries this year, with brokers paying £4m. Provider contributions, which the FCA introduced as a requirement in May 2018, will provide the remaining £1m of the total levy. This is a significant fall from the £25m paid last year, due […]

FSCS Interior 480

FSCS declares four mortgage firms in default

The Financial Services Compensation Scheme has named four mortgage and financial firms as becoming insolvent in December. Seren Independent Advisers Limited, based in Oxfordshire, Well Alley Limited in West Sussex and Gann Management Limited in Manchester all failed at the end last year. The FSCS also reports that HBFS Financial Services Limited in Hertfordshire is […]

FSCS Interior 480

FSCS declares two mortgage firms in default

The Financial Services Compensation Scheme has named two mortgage firms and a financial adviser as becoming insolvent during October and November. Standish Mortgage Services, based in Wigan, failed in October, and Castle Financial Services, based in Wolverhampton and Mortgage Match in Nottingham, failed in November. The FSCS advises that consumers could be in line for […]

Auto-enrolment

Minimal compliance: Is it enough?

Along with global legal practice Eversheds Sutherland, we look at why employers may want to do more than simply meet the legal minimum in terms of their auto-enrolment duties. Our new policy paper — ‘Automatic enrolment and the law – how far do employers’ duties extend?’ — summarises current minimum duties of employers to enrol […]

Newsletter

News and expert analysis straight to your inbox

Sign up