Latest news with #FinancialServicesCompensationScheme
Scottish Sun
5 hours ago
- Business
- Scottish Sun
Major rule change for firms like PayPal and Revolut to protect millions of customers' cash
Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) MILLIONS of people using payment firms will see their cash better protected due to a major rule change. The Financial Conduct Authority (FCA) is set to enforce new practices to ensure shoppers are offered bigger refunds, and with fewer delays, if a payment firm goes bust. Sign up for Scottish Sun newsletter Sign up 1 The FCA is shaking up its rules for payment firms from next May Credit: Getty The new rules, affecting those using firms like PayPal, Revolut and Wise, come into force from May 7, 2026. The rules will oblige payment firms to prove customer's money is protected through monthly reports. Firms will also have to be audited once a year to ensure they are safeguarding funds, carry out daily checks to keep records of funds and put risk management practices in place so customers' cash is protected should they go out of business. The FCA said it is giving industry nine months until the new rules kick in so it has enough time to prepare. Read more on Money ALL CHANGE Major British bank with 5million customers could disappear after sale to rival It also said the audit rule will not apply to firms holding less than £10,000 in customer funds. Funds held by payment and e-money firms are not protected by the Financial Services Compensation Scheme (FSCS), which entitles you to compensation of up to £85,000 if a financial services firm fails. Instead, they are responsible for safeguarding customers' funds themselves. But this has historically led to money being lost or delays in refunds being issued when firms have gone out of business. A number of payment firms went bust between 2018 and 2023, leaving customers short of cash. Firms that became insolvent, when a business cannot afford to repay its debts, over this five-year period had average shortfalls of 65% of their customers' funds. I chase refunds for a living - how to get your money back Matthew Long, director of payments and digital assets, FCA, said: "People rely on payment firms to help manage their financial lives. But too often, when those firms fail, their customers are left out of pocket. "Most of those who responded to our consultation agreed we need to raise standards to protect people's money and build trust, but any changes needed to be proportionate, especially for smaller firms. "We'll be watching closely to see if firms seize the opportunity and make effective improvements that their customers rightly deserve – this will help us to determine whether any further tightening of rules is necessary." It comes after the FCA launched a consultation looking at safeguarding practices among payment firms last September. Firms were given until December that year to offer their thoughts on the consultation. Payments firms, also known as payment service providers (PSP), are third-party companies that facilitate electronic payments for businesses through various payment methods. Customer use of them has risen in recent years. The FCA's 2024 Financial Lives Survey revealed that the percentage of people using them had grown from 1% in 2017 to 12% in 2024. It also found roughly one in 10 e-money holders in the UK was using e-money accounts as their main day-to-day transactional account. The Sun asked PayPal, Revolut and Wise to comment. FCA consulting on car finance mis-selling compensation scheme MILLIONS of drivers are set to get £950 car financing compensation after the FCA launched a consultation. The regulator confirmed on Sunday it will consult on a redress scheme for motorists stung by extra charges and interest. This follows the Supreme Court's decision last Friday to overturn a ruling that accused companies of breaking the law by not telling borrowers about "hidden" commission payments. Claims about "commission disclosure complaints" impact up to 99% of car finance agreements. However, the UK's highest court sided with the banks, meaning they avoided the possibility of having to pay compensation to millions of drivers over these complaints. Despite this, drivers who took out personal contract purchase (PCP) or hire purchase agreements may still be eligible for compensation, along with those who were subjected to "excessive" commission charges. This is because the FCA has been investigating and considering a financial redress scheme for car finance agreements made before 2021. These claims focus on "discretionary commission arrangements" (DCAs), which applied to 40% of car finance deals. Under DCAs, brokers and dealers could increase the interest rates charged to borrowers without informing them. By doing this, they earned higher commissions. The financial watchdog has now confirmed plans to consult on an industry-wide compensation scheme. This consultation is set to begin by early October, and if the scheme is approved, the first payments could be made in 2026. Do you have a money problem that needs sorting? Get in touch by emailing money-sm@ Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
Western Telegraph
31-07-2025
- Business
- Western Telegraph
Lloyds Bank customers urged to act now or miss out on £185
Their current cash incentive for switching is £185 and runs from Tuesday, 1 July to 28 July 2025. This date is the last day you can both open a new account and start the switch. The payment will be made within ten working days of the switch completion. Lloyds said: "As long as we receive your application before the 28th of July ends, you'll be able to qualify for the switch offer." Looking to get your money moving and start investing? Here's how Lloyds Bank can help you to do just that. Search Lloyds Bank Ready-Made investments to find out more. Bank — Pennies To Pounds (@penniestopound) July 22, 2025 The switch must be via the Current Account Switch Service, according to the terms and conditions from the high street bank. Your money is secure – the Financial Services Compensation Scheme (FSCS) guarantees up to £85,000 per person, per financial institution. This means that if your bank ever went bust, you would be guaranteed your money back (up to £85,000), according to Money Saving Expert, the site founded by BBC and ITV star Martin Lewis. You can only get one payment per person, regardless of how many accounts you open. And you'll miss out completely if you've received a switching bonus from Lloyds or Halifax since April 2020. Recommended reading: MSE detailed: "As well as the upfront switch cash, with Club Lloyds you can choose one of the rewards above each year." "Do note there's a £5/month fee unless you pay in £2,000+ a month," the consumer champion's advice website has also added. It went on to say: "You also get access to a linked regular saver paying 6.25% fixed interest for a year on up to £400/month (maxed out, it's £161/year interest) and the debit card has no fees on overseas spending with near-perfect exchange rates. "The switch offer is also available on the Club Lloyds Silver account, one of our top picks for packaged accounts which provides a range of insurance for £11.50/month."
CNBC
30-07-2025
- Business
- CNBC
Why Revolut's journey to become a UK bank is taking so long
LONDON — A year on from securing its initial U.K. bank license, Revolut is still awaiting full authorization from regulators. The fintech giant was granted a banking license with restrictions in July 2024 from the U.K.'s Prudential Regulation Authority (PRA), bringing an end to a years-long application process that began back in 2021. The PRA is a unit of the Bank of England. This key victory moved Revolut into what's known as the "mobilization" phase of a company's journey toward becoming a full-fledged bank. During this period, firms are limited to holding only £50,000 of total customer deposits — well below the hundreds of billions of pounds customers deposit with major high street lenders such as Barclays, HSBC and Santander. Revolut customers in the U.K. are also still served by the company's e-money unit, instead of its banking entity. This means they are not directly insured by the Financial Services Compensation Scheme, which protects customers up to £85,000 if a firm fails. Roadblocks and the sheer size of Revolut are among the many reasons why the firm's bank authorization process is taking longer than expected, analysts told CNBC. Revolut is currently still awaiting its consumer credit license, which would enable it to offer credit cards and other services in the U.K. Meanwhile, the Financial Times reported Tuesday that a meeting arranged by British Finance Minister Rachel Reeves with Revolut and the PRA was cancelled after an intervention from Bank of England Governor Andrew Bailey. CNBC was unable to independently verify the report. The BOE declined to comment and the Treasury did not immediately respond to CNBC's request for comment. A spokeswoman for Revolut said that while the firm was unable to comment on specifics, the company remains on track to launch a fully regulated U.K. bank this year. "We are progressing through the final stages of mobilisation and continue to work constructively with the PRA," she told CNBC via email. "Given Revolut's global scale, this is the largest and most complex mobilisation ever undertaken in the UK. A thorough review is an expected part of the process and getting this right is more important than rushing to meet a specific date." Barney Hussey-Yeo, CEO of fintech firm Cleo, said that "anti-growth regulatory posture" from the U.K. was likely a contributing factor in the delays to Revolut exiting its mobilization phase. "Revolut is already a regulated bank in over 30 countries, including some of the toughest jurisdictions in the world," he told CNBC, noting the company is worth more than some major U.K banks on a rumored $65 billion valuation. "If that's not enough scale or rigour for the PRA, it raises serious questions about the UK's regulatory expectations — because they now look excessive," Hussey-Yeo added. Regulators are nervous about getting it wrong due to the lingering "scar tissue" of the 2008 financial crisis, said Simon Taylor, head of strategy at fraud prevention platform Sardine AI. "The U.K. has historically had one of the single most risk-averse regulatory postures in the world when it comes to capital requirements, especially," he told CNBC. Another factor at play is Revolut's size. No other firm has entered the mobilization phase of bank authorization with more than 500,000 customers. Revolut serves over 10 million customers in the U.K. Once it exits the mobilization phase, Revolut would need to gradually start migrating customers to its U.K. banking entity — a significant undertaking. This, coupled with Revolut's already lengthy history in the U.K. market and complaints over fraud, makes it a "complex player to authorize," according to Taylor. "A lot of the larger banks historically complained about Revolut being a major source of their fraud risk," he told CNBC. "My guess is that these complaints and issues have shown up in the BoE's regulatory reports, and they have material, well grounded concerns." Still, Taylor conceded that Revolut has "some of the most sophisticated technology to detect and prevent these issues, and has been at the front line of dealing with the scams issue." Ensuring Revolut obtains full authorization to operate a bank is important for the U.K. government — particularly as it faces criticisms from the tech industry that changes to the non-domicile tax status, along with increased taxes on capital gains, have created a hostile environment for entrepreneurs. "Every element of wealth capture for the U.K. — jobs, taxes, equity gains — has been eroded," Cleo's Hussey-Yeo said, adding that there was a heightened risk that richly valued fintechs like Revolut could move their global headquarters outside of the U.K. if such measures continue. Taylor said Revolut receiving full bank authorization "would be a massive symbolic win" for the government. "The Chancellor [of the Exchequer] cannot afford to lose Revolut to another jurisdiction — but Revolut looks at a global market and sees lots of willing suitors for its business, and very little willingness from the U.K.," he told CNBC.
Glasgow Times
29-07-2025
- Business
- Glasgow Times
Lloyds Bank customers urged to act now or miss out on £185
Their current cash incentive for switching is £185 and runs from Tuesday, 1 July to 28 July 2025. This date is the last day you can both open a new account and start the switch. The payment will be made within ten working days of the switch completion. Lloyds said: "As long as we receive your application before the 28th of July ends, you'll be able to qualify for the switch offer." Looking to get your money moving and start investing? Here's how Lloyds Bank can help you to do just that. Search Lloyds Bank Ready-Made investments to find out more. Bank — Pennies To Pounds (@penniestopound) July 22, 2025 The switch must be via the Current Account Switch Service, according to the terms and conditions from the high street bank. Your money is secure – the Financial Services Compensation Scheme (FSCS) guarantees up to £85,000 per person, per financial institution. This means that if your bank ever went bust, you would be guaranteed your money back (up to £85,000), according to Money Saving Expert, the site founded by BBC and ITV star Martin Lewis. You can only get one payment per person, regardless of how many accounts you open. And you'll miss out completely if you've received a switching bonus from Lloyds or Halifax since April 2020. Recommended reading: MSE detailed: "As well as the upfront switch cash, with Club Lloyds you can choose one of the rewards above each year." "Do note there's a £5/month fee unless you pay in £2,000+ a month," the consumer champion's advice website has also added. It went on to say: "You also get access to a linked regular saver paying 6.25% fixed interest for a year on up to £400/month (maxed out, it's £161/year interest) and the debit card has no fees on overseas spending with near-perfect exchange rates. "The switch offer is also available on the Club Lloyds Silver account, one of our top picks for packaged accounts which provides a range of insurance for £11.50/month."
South Wales Argus
29-07-2025
- Business
- South Wales Argus
Lloyds Bank customers urged to act now or miss out on £185
Their current cash incentive for switching is £185 and runs from Tuesday, 1 July to 28 July 2025. This date is the last day you can both open a new account and start the switch. The payment will be made within ten working days of the switch completion. Lloyds said: "As long as we receive your application before the 28th of July ends, you'll be able to qualify for the switch offer." Looking to get your money moving and start investing? Here's how Lloyds Bank can help you to do just that. Search Lloyds Bank Ready-Made investments to find out more. Bank — Pennies To Pounds (@penniestopound) July 22, 2025 The switch must be via the Current Account Switch Service, according to the terms and conditions from the high street bank. Your money is secure – the Financial Services Compensation Scheme (FSCS) guarantees up to £85,000 per person, per financial institution. This means that if your bank ever went bust, you would be guaranteed your money back (up to £85,000), according to Money Saving Expert, the site founded by BBC and ITV star Martin Lewis. You can only get one payment per person, regardless of how many accounts you open. And you'll miss out completely if you've received a switching bonus from Lloyds or Halifax since April 2020. Recommended reading: MSE detailed: "As well as the upfront switch cash, with Club Lloyds you can choose one of the rewards above each year." "Do note there's a £5/month fee unless you pay in £2,000+ a month," the consumer champion's advice website has also added. It went on to say: "You also get access to a linked regular saver paying 6.25% fixed interest for a year on up to £400/month (maxed out, it's £161/year interest) and the debit card has no fees on overseas spending with near-perfect exchange rates. "The switch offer is also available on the Club Lloyds Silver account, one of our top picks for packaged accounts which provides a range of insurance for £11.50/month."
