HOW COMPENSATION IS CALCULATED ?
The maximum compensation payable under the Scheme for each depositor is EUR 100,000, irrespective of the number of accounts or the currencies these are held at the Credit Institution that has failed. Compensation is calculated based on eligible deposits held on the compensation date. Joint account balances will be divided equally between each account holder, unless another arrangement is explicitly in place.
The compensation payable will include any interest on an eligible deposit which has accrued but not been credited at the compensation date.
All compensation payments are made in GBP. Therefore, where deposits are in foreign currencies, these will be converted accordingly at the applicable exchange rate on the compensation date.
PROCESS
If the Credit Institution fails and you feel that you are entitled to compensation, you will not initially be required to specifically apply for compensation. The Scheme will obtain information about your deposits directly from the failed Credit Institution’s systems and payments made accordingly if possible.
All Credit Institutions will be required to identify and classify all depositors and deposits in such a manner which would enable the Scheme to calculate the amount of compensation due to each depositor. This information will have thorough periodic testing to ensure the Credit Institutions are conforming to legislation.
Depositor information will be treated by the Scheme with the strictest confidentiality and taking data protection into consideration.
TIMEFRAME
The length of time a claim takes to process will depend on a number of factors, some of which are entirely outside our control. Some of this may be driven by the type and complexity of the claim and the level of extra information required following the receipt of initial information.
By 1 January 2024, the Scheme is obliged to pay compensation within 7 business days from the date when a Credit Institution has been declared in default because it is unable to repay deposits to its depositors. However, given the infancy of this specific Scheme, repayment deadlines will be gradually reduced from 20 working days to 7 working days in phases:
- 20 working days until 31 December 2018
- 15 working days until 31 December 2020
- 10 working days until 31 December 2023
- 7 working days as from 1 January 2024
Until 31 December 2023, if we can’t make the compensation payable within 7 working days we will ensure that, upon request, within 5 working days depositors have access to an appropriate amount of their covered deposits to cover cost of living. This amount will then be deducted from the compensation payable to the depositor.
Repayment of payment of compensation may be deferred when:
- it’s uncertain whether a person is entitled to receive any compensation or the deposit is subject to a legal dispute or investigation e.g. money laundering; - the deposit is subject to restrictive measures imposed by a national government or international body;
- the account is dormant – there has been no transaction relating to the deposit in the last 24 months – and where the value of the deposit is lower than the administrative costs that would be incurred by the FSRCC had repayment taken place;
- the amount to be repaid is deemed to be part of a deposit;
- the amount to be repaid is to be paid by the DGS of an EEA State;
- for trust accounts, when further details are required; or
- for other deposits, when further information is required.