Bank cash protection notices plan

Images of high street bank signsBanks would be compelled to display notices in branches and on their websites telling savers how much of their cash is protected under plans by the Financial Services Authority (FSA).

The FSA said the move is part of a drive to improve confidence around compensation by making people more aware that their deposits are protected up to £85,000 if the bank goes bust under the Financial Services Compensation Scheme (FSCS).
Building societies and credit unions will also need to put posters and stickers up and foreign banks with branches in the UK who are not covered by the scheme will have to state this as well as saying which other national scheme is providing protection.

Deposit holders covered by the scheme will need to state: "Your deposits are protected up to £85,000 by the Financial Services Compensation Scheme, the UK deposit protection scheme. Any deposits you hold above this amount are not covered."

The proposals are subject to consultation and it will be several months before posters would start to appear.

FSA chief executive Hector Sants said: "It is vitally important that customers have confidence in the banking system and that is why we are taking this step of making it obligatory for firms to prominently display compensation information.

"Consumers must understand how their money is protected and be clear about the limits - any money over £85,000 in a deposit account is not protected by the scheme and is at risk.

"Customers should also know which compensation scheme they are relying on, which country it is based in and understand how it would work - for example how long it would take to get your money back.

"The posters and website notices we are going to be mandating will help to prompt consumers to get more information and to make informed decisions about how much money to deposit with one bank."
© 2011 Press Association
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