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FSCS places network in default two years after PI lapse

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The Financial Services Compensation Scheme has placed a network in default almost two years after the company failed to secure professional indemnity insurance.

Money Marketing reported back in June 2013 Kent-based network Virtual Net Europe had alerted members it was unable to secure PI cover. The network posted a £182,532 loss for the previous year.

At the time Virtual Net Europe had 11 member firms, some of which were left unable to trade.

The firm has now been included among the latest list of firms declared in default, which was published by the FSCS today.

Overall the FSCS placed 62 firms in default, 41 of which were investment and pensions firms.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. David Bennett 15th May 2015 at 2:40 pm

    The article does not say why PII cover could not be obtained. That said, 2 years sounds like a long time before FSCS took this action.

  2. Virtual Net showed all the signs of having problems years ago – I spoke to members who openly admitted that they were informing the FSA (at the time) of issues. As usual nothing until the thing falls apart (Harlequin is another example where again advisers seem to have been reporting problems only to be ignored by the regulator)

    The regulator seems to work on the basis that if eventually it all goes belly up then the FSCS levy will pick matters up. Well, indeed it does but it’s hardly a great way of going about things.

    I always say this – we all have a personal regulator – it’s the one on your boiler at home. It regulates – if the thing gets a bit hot it knows to shut down rather than having you come home with no roof. The FCA needs to re-educate itself as to what the verb regulate actually means.

  3. Julian Stevens 15th May 2015 at 4:56 pm

    Yet Mark Neale would have us believe that everything’s hunky dory with the FSCS ~ which one might suppose it is if you regard unfettered powers to demand additional levies ad infinitum to be a good system. Personally, I don’t. If only the FCA were to be made accountable for its never-ending litany of failures, we might see an end to this monumentally unjust system of everyone else being forced to pay.

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