Consumers could be in line for compensation, as the UK Financial Services Compensation Scheme (FSCS) has confirmed that five firms were declared in default in June and July. These firms have gone out of business and are unable to meet any claims themselves.

Declarations by FSCS from 1 June 2022 to 31 July 2022:

• County Capital Wealth Management Limited t/a The Pension Review Service, Fathom (FRN 463679) Prosperity House, 1 Barnfield Road, Spennymoor, County Durham, DL16 6EB
• Cowley & Miller Independent Financial Services Ltd (FRN 550002), 152a High Street, Irvine, Ayrshire, KA12 8AN
• Curzon Capital Limited (FRN 191520) 10 Brick Street, London, United Kingdom, W1J 7HQ
• Smith, Law & Shepherds I.F.A Limited (FRN 719232), 209 Liverpool Road, Birkdale, Southport, Merseyside, PR8 4PH
• Tradenext Ltd (FRN 573464), 54 Ethelbert Gardens, Ilford, IG2 6UN

If a regulated financial firm is no longer trading and can’t pay a customer’s claim, FSCS can step in to pay compensation.

Sarah Marin, FSCS’s Chief Customer Officer, said

“In 2021/22, we helped 108,838 customers get back on track by either paying them compensation or enabling them to transfer to a new provider for their investment or insurance policy. Whilst the number of firm failures has reduced, the total compensation amount is forecast to increase as claims volumes and values per firm rise.”

For the April-May 2022 period, FSCS has confirmed that 11 firms were declared in default.

Before FSCS can pay compensation, it must be satisfied that an authorised financial services firm is not in a financial position to meet claims against it (e.g. if the firm has failed and entered an insolvency process such as administration or liquidation). FSCS describes this as being ‘in default’. The Scheme will declare a firm in default if:

• it has received at least one claim; and
• it is satisfied that the firm is unable to return money to eligible customers itself.