New rules, which will come into effect on 31 August, will require the businesses to display posters and stickers in branches and on websites explaining which scheme applies to customers.
If customers are using the UK branch of a foreign bank from the European Economic Area (EEA), the posters will have to detail how customers are not covered by the Financial Services Compensation Scheme (FSCS), and specify which national scheme will provide the protection.
Andrew Bailey, FSA director of UK banks and building societies, said the new rules were needed to enable customers to feel confident about their money.
“Too many people assume that because their branch is located on a local high street in the UK, they are covered by the FSCS,” he said. “This is not true for UK branches of EEA banks where the home country’s deposit guarantee scheme applies.
“Banks, building societies and credit unions will have to display these compensation stickers or posters in the branch window along with a sticker at the cashier’s window or desk and a further poster in a prominent position inside.”
Eligible depositors in banks that are incorporated in the UK, including the UK incorporated subsidiaries of foreign banks, are covered by the FSCS up to a limit of £85,000.
The FSCS also covers eligible depositors in banks that are incorporated outside the EEA but authorised by the FSA to accept deposits in the UK.
