The letter from BMG Williams (Money Marketing, January 8) could have left readers with the impression that approaching the Financial Services Compensation Scheme is an easy way for consumers to get compensation.
The FSCS is a fund of last resort for customers of authorised firms, not a bottomless pit. We only pay compensation if a claim is eligible under our rules, there is a limit to the amount of compensation we can pay and the scheme only provides compensation for financial loss.
We do not pay compensation just because a product has not performed to a customer's expectations.
We are very conscious that our funding comes from the industry and we take seriously our responsibility to only pay compensation when it is due. Whether a claim is eligible or not is governed by our rules, which were made by the FSA after full consultation.
The existence of a fund of last resort is essential for consumers who are owed money by an authorised firm that is unable to pay.
However, we do make clear to consumers that there are limits to the protection that is available.
Suzanne McCarthy Chief executive, Financial Services Compensation Scheme