The Financial Services Compensation Scheme paid out £326 million in compensation to consumers during the latest financial year.
The latest annual report from the not-for-profit scheme showed that the number of new claims (62,030) fell by more than a third in 2012/13 from the previous financial year, while it also handled 14% fewer enquiries.
But the number of PPI claimants increased to 19,000, with four in ten of these claims initiated by claims management companies.
Recoveries
The FSCS reported that it had recovered £777 million from failed firms, including an 8% rise in the amount recovered from banks which failed in 2008/2009.
The scheme recovered £35 million from London Scottish, £39 million from Heritable, £282 million from Icesave and £373 million from KSF. It said it expected to recover more from the institutions which collapsed during the global financial crisis.
The Icesave fund from Landsbanki has made the most headlines over the past year after the UK government joined forces with the Netherlands in an attempt to compel the Icelandic state to provide compensation for state-backed bailouts (read more).
The FSCS recovered over quarter of a billion from Icesave in 2012/2013.
Mission and Targets
The FSCS protects consumers of registered financial institutions for up to £85,000 in deposits. (See our guide on secure savings and compensation for more details).
It said that it had met service delivery standards for compensating customers as a result of banking failure, but that it had narrowly missed its target for turning around PPI claims.
It added that it was committed to increasing awareness about its work, following the embarrassing revelation last year that only 3% knew about the securities made available on savings despite a £1 million advertising campaign.
New disclosure rules now require financial institutions to display information about the FSCS prominently inside their branches and within relevant brochures, such as the notice displayed above (read more).
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Keith McDonald
Which4U Editor
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