The Financial Conduct Authority (FCA) has asked firms to write to their customers ensuring they understand how their money, particularly electronic money, is protected.
In a 'Dear CEO' letter published on Tuesday (18 May), FCA head of department, payments supervision Paul Roe said: "We are concerned that many e-money firms compare their services to traditional bank accounts or hold themselves out as an alternative in their financial promotions, but do not adequately disclose the differences in protections between e-money accounts and bank accounts." In particular, Roe said, they do not make it clear that the Financial Services Compensation Scheme (FSCS) protection does not apply. If an e-money firm was to go out of business, then the money held within t...
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