FSA proposes ‘no change’ to compensation and Ombudsman payment limit
In a consultation paper the FSA is recommending no change to the existing limits.
The key findings of the review were that:
-most claims or complaints are still well below the current maximum limits;
-there is no evidence that consumer behaviour and market confidence are being significantly affected by current limits;
-FSCS limits significantly exceed EU minimum limits (currently ?20,000) for deposits and investments;
-FSCS limits are also generally higher than in other EU member states and other major world economies, with the exception of deposits.
-there is no evidence of significant or widespread consumer detriment, or distortions to consumer behaviour, either now or in the immediate future, that would justify recommending changing the limits.
But the FSA’s work has shown that there is a very wide range of views among stakeholders and the FSA is therefore consulting on some specific issues.
Where applicable, this consultation is being conducted jointly with the Financial Ombudsman Service. The case for increasing the maximum limit for ombudsman awards from the current ?100,000 to ?200,000 is discussed.
The current limits have been in force since the FSCS and the Financial Ombudsman Service started operating in December 2001, under the Financial Services and Markets Act 2000. The FSA plans to review the compensation and eligibility again at regular intervals.