SAVERS could be left seriously out of pocket due to bank workers’ ignorance of the Financial Services Compensation Scheme (FSCS), according to a new mystery shopping survey carried out by Which?
The FSCS is designed to compensate consumers if a bank or building society goes bust, but the research revealed that bank staff are routinely giving out wrong information about the scheme, meaning that people’s savings may not be fully protected.
The consumer rights organisation tested staff at 13 of the biggest providers, posing as new customers with £100,000 to deposit into a savings account.
Not a single member of staff proactively told researchers about the FSCS, or warned them that only £85,000 of the £100,000 total would be protected in the event of the bank’s collapse.
Even when prompted, not all staff could state the correct amount protected by the FSCS, several admitting they had no idea.
Richard Lloyd, executive director of Which?, said: “It is inexcusable that bank staff can’t give customers basic information about the compensation scheme if their bank goes bust.
“In the event of a collapse, this bad advice could cost people many thousands of pounds from their life savings.”
He added: “We hope this is a wake-up call to the banks that they need to improve staff training.”
Of all the banks and mutuals, the Yorkshire Building Society came out best, with 88 per cent of questions answered correctly, while HSBC came bottom, with a score of just 51 per cent.
A spokesman for HSBC said: “We are disappointed with the results of the Which? survey and are committed to improving how we explain and promote the benefits of FSCS to our customers.
“Since this mystery shop we have initiated a new learning programme for all our customer-facing employees specifically on the FSCS and the valuable level of protection it affords savers.”
Another question Which? asked bank staff was whether savings elsewhere would affect the level of protection afforded by the FSCS.
The rather complex answer is that it depends on where those savings are held, because the £85,000 limit applies per banking licence, now known as Prudential Regulation Authority (PRA) authorisation, rather than per banking brand.
This could mean that if you have savings with more than one member of the same banking group, the full amount you have saved may not be covered.
For example, if you have savings with The Co-operative Bank, Britannia and Smile, the total amount covered would be £85,000 as these brands share the same authorisation.
Conversely, RBS and NatWest are part of the same group, but retain separate PRA authorisations.
Only one provider, First Direct, managed to score more than half marks on this question, and not one staff member at Santander got it right.
A spokesman for Santander said it took its responsibility to its customers extremely seriously and that it communicated “the level and nature of FSCS protection regularly, and comprehensively, in branch, on the web and in customer letters”.
He added: “It should be noted that if the enquiry proceeds to an application, we will send customers our Terms of Business with details of our regulators, your rights to confidentiality under the Data Protection Act and protection under the Financial Services Compensation Scheme.”
A spokesman for the BBA, which represents the banking industry, said: “All employees are made aware of the FSCS and many banks have relevant training, so it is disappointing that more staff did not communicate the benefits of the scheme when asked.”
He added: “The BBA will work together with the banks to look at the concerns raised in this survey to help make sure that customers are given consistent and accurate information on FSCS protection.”