Consumers across the UK can now claim compensation if they have lost money as a result of their dealings with five mortgage advisors the FSCS has declared in default.
The five firms are mortgage advisors PMSG Insurance Services Limited also trading as Professional Mortgages Services Group, Financial Quest UK Limited, Finance Direct (UK) Limited, First Class Mortgages Limited, and Network Data Limited.
Network Data went into administration in 2009 owing appointed representatives more than £2m.
Declaring the firms in default means they are unable or likely to be unable to pay claims against them and triggers FSCS protection for their customers.
Due to a recent change in the compensation limits, the maximum amount that consumers may be able to claim varies.
For mortgage advice and arranging the maximum level of compensation for claims against firms declared in default before 1 January 2010 is 100% of the first £30,000 and 90% of the next £20,000 up to £48,000 per person per firm.
However, if a firm was declared in default on or after 1 January 2010 the new compensation limit is 100% of the first £50,000 per person per firm.
The FSCS says some smaller businesses are also covered but only for deposit and investment claims. Larger businesses are generally excluded, although there are some exceptions to this – for example for claims in respect of certain compulsory insurances.
A smaller company must meet two of the following criteria (as set out in section 247 of the Companies Act 1985 or section 382 of the Companies Act 2006 as applicable):
o Turnover: not more than £6.5 million
o Balance sheet total: not more than £3.26 million
o Total number of employees: not more than 50
Kate Bartlett, director of operations at FSCS, says: “The FSCS’s role is to help people who have lost money as a result of doing business with an authorised firm that is unable or likely to be unable to meet claims made against it.
“The FSCS helps to instil confidence in the financial services sector by ensuring consumers get the compensation they are entitled to when this happens. People who believe they may have a claim against the firms should contact the FSCS.”