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Can you get compensation if the provider did not go insolvent?
Yes, sometimes you can. In the UK, compensation for lost money is not only available when a financial provider fails or becomes insolvent. If a firm acted incorrectly, you may still have a claim through other routes such as complaints, compensation schemes, or the courts.
The right outcome depends on what went wrong and which type of provider was involved. For example, banks, insurers, investment firms, and pension providers can all be subject to different rules. The key question is whether the loss came from mis-selling, poor administration, fraud, or another form of wrongdoing.
What if the firm is still trading?
If the provider is still trading, you would usually start by complaining directly to the firm. Financial businesses in the UK must have a complaints process, and they should investigate your issue before offering a final response. If they accept fault, they may offer compensation or put things right.
If you are unhappy with the final response, you may be able to take the complaint to the Financial Ombudsman Service. The Ombudsman looks at whether the firm treated you fairly and followed the rules. It can award compensation if it decides you lost money because of the provider’s mistake.
When the Financial Services Compensation Scheme applies
The Financial Services Compensation Scheme, or FSCS, is usually used when a financial firm is unable to meet claims. That often happens if the firm has failed, but insolvency is not the only issue in some cases. The FSCS can also help where a firm is no longer able to pay because it has been declared in default.
However, if the firm is still solvent and able to deal with complaints, the FSCS normally will not step in first. In that situation, you would usually need to follow the firm’s complaints process or go to the Ombudsman. The FSCS is therefore a safety net, not the main route for every dispute.
Examples of incorrect action by a provider
You may have a claim if the provider gave unsuitable advice, handled your account badly, or failed to carry out instructions properly. Other examples include admin errors, delayed payments, incorrect charges, or poor disclosure of risks. In some cases, the loss may be the result of fraud or unauthorised activity.
The amount of compensation will depend on the facts. It may cover direct financial loss, lost interest, or the cost of putting the position right. Evidence such as statements, letters, emails, and notes of phone calls can be very important.
What should you do next?
Act quickly and keep a clear record of what happened. Contact the firm in writing, explain the loss, and ask for a complaint reference. If you can, include dates, account numbers, and copies of any supporting documents.
If the issue is not resolved, consider escalating it to the Financial Ombudsman Service. If you are unsure which route applies, getting legal or financial advice may help. The earlier you act, the easier it may be to recover money or preserve your claim.
Frequently Asked Questions
It is a way to seek redress when a UK financial services firm has caused you financial loss through mistakes, poor advice, fraud handling failures, or other wrongdoing, even though the firm is still solvent and trading.
You may be eligible if you are an affected consumer, small business, charity, or eligible complainant and you can show that the provider acted incorrectly and that this caused you a loss.
Most claims should first be raised directly with the financial firm through its complaints process, because the firm may be able to put things right, refund losses, or offer compensation without further escalation.
You normally submit a written complaint to the firm, explain what happened, identify the loss, include evidence, and state what remedy you want, such as reimbursement, correction, or interest.
Useful evidence includes statements, contract terms, emails, recordings, transaction records, complaint letters, advice documents, and any calculations showing how the provider's error caused your loss.
The amount usually depends on the actual loss suffered and may include reimbursement, interest, fees, and in some cases additional distress or inconvenience awards if the complaint outcome allows it.
It can sometimes include losses linked to missed investment performance if you can show the firm’s incorrect action directly caused the missed gain and the calculation is reasonable and evidence based.
Yes, if a bank or payment provider made an error such as sending money to the wrong account, mishandling a payment, or failing to process a transaction correctly, you may be able to claim compensation.
Yes, if regulated advice was unsuitable, misleading, or incomplete and that advice caused you financial loss, you may have a claim for redress or compensation.
Yes, if an insurer incorrectly rejected, delayed, underpaid, or mishandled a valid claim and that caused you loss, you can complain and seek compensation or correction.
Deadlines vary, but complaints are often subject to time limits from when you became aware of the problem and from when the event occurred, so you should act quickly.
The firm should investigate, respond within the applicable complaint timeframe, and either reject the complaint, offer a settlement, or explain what remedy it will provide.
If you disagree with the firm’s final response, you can usually take the complaint to the Financial Ombudsman Service if the firm and complaint type are within its jurisdiction.
Yes, the Financial Ombudsman Service can often consider complaints about regulated financial firms where the provider acted incorrectly and caused loss, provided the case is eligible and within its rules.
Possibly, but any award may be reduced if your own actions contributed to the loss, depending on the facts and the decision-maker’s assessment of responsibility.
Yes, compensation can include simple interest or another appropriate adjustment to reflect the time you were without the money, depending on the remedy ordered or offered.
It can sometimes lead to correction of inaccurate credit information, and if the firm’s error harmed your credit file, you may be able to seek rectification and compensation.
In some cases, yes, especially for eligible small businesses or certain other complainants, but eligibility and limits depend on the firm, the product, and the complaint route.
There is usually no fee to complain to the firm or to the Financial Ombudsman Service, though you should be wary of claims companies charging high commissions for simple complaints.
The best first step is to gather evidence and send a clear complaint to the financial firm explaining the incorrect action, the loss caused, and the compensation or correction you want.
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