Your Electronic Money is not covered by the Financial Services Compensation Scheme


#1

I just read the new T&C’s and it’s written:

3.4. When we hold Electronic Money for you, us holding the funds corresponding to the Electronic Money is not the same as a Bank holding money for you in that: […] © your Electronic Money is not covered by the Financial Services Compensation Scheme.

I thought our money was in fact covered by the FSCS.
Has it been changed recently??


Safety Concerns
#2

Hi. It’s not yet covered. Read this https://blog.revolut.com/why-a-european-banking-licence-will-be-a-huge-deal-for-your-revolut-account/


#3

Hey @kimw :slight_smile:

No, it’s always been like this, I believe.


#4

@kylo32 Thanks. I just read the article. It’s a good news BUT until March 2019 only.
It’s written:

One of the key benefits of obtaining a banking licence is that customer funds will be protected under the European Deposit Protection Scheme (EDPS).

After that UK will be out of the European Union and so our money won’t be protected anymore by the EDPS, because of BREXIT.


@Juliopp Thanks.


#5

It not so easy because as I read, European Deposit Protection Scheme will protect our money, because:

  • Lithuania will not exit from UE in the near future (…It said it has applied for its license through the Lithuanian central bank and has sufficient capital in place…)
  • Maybe founds of people leaving in UK will be protected as GB is leaving UE only, not EEA (European Economic Area) but im not sure about it

#6

Oh yeah Lithuania is so wealthy, it will take few more loans to pay out everyone. But maybe it won’t be needed as this should end soon.


#7

Your money is not held in Lithuania


#8

Now not - yes, in UK banks. But in my opinion, when :r: will have Lithuanian bank licence it should be stored there.


#9

Well, if so I will close my account.


#10

Why is that? :confused:


#11

@QuQu
This article is worrying but I wonder if we can really trust zerohedge.com because I read few more articles there and the structure makes me think of fake news or conspiratorial news. And I was right, after a research on zerohedge.com I found this:

Zero Hedge’s content has been classified as anti-establishment, conspiratorial, and economically pessimistic, and has been criticized for presenting extreme and sometimes pro-Russian views.

But I agree with one aspect on that article: Diversify savings across banks and in different countries.

It’s why I agree somehow with @badskittler if :r: transfer all their assets to Lithuania then we’ll have to be very careful with our Revolut accounts.
I already don’t use much my :r: account because I found the online support being not reliable and not professional. Actually because of them I lost a special offer I was offered (a free contactless card + free delivery). So I don’t really trust Revolut at the moment.


#12

No, funds with Revolut aren’t covered under an e-money-license. But other than with banks, it is less likely that customer’s funds are affected in case of bankruptcy, because customer’s funds are segregated from the company. You win some, you loose some.

If someone is interested, I could share a research paper from BBVA about protecting funds under e-money-licenses.


#13

Please do, @Frank :smiley:


#14

Here we go:


#15

@KIMW

I know Zero Hedge is a tricky site and articles tend to be with “strong” opinion.

But this does not change the fact about ECB plans to end deposit protection.

Plus maybe you are not aware about possible haircuts as they did with Cyprus banks “Central Bank of Cyprus struck a deal with Troika to a 47.5% haircut on deposits exceeding 100,000 euros in the Bank of Cyprus.” http://yiangou.com.cy/news-read/89

So ending deposit protection and haircutting as they wish to save banksters. Paradise, isn’t it?


#16

Yeah, as I said it’s worrying. But it won’t be only for Electronic Money bank accounts like :r:.
What the European Central Bank (ECB) has proposed would apply for all banks.

Concerning your link, the article does not mention a date but I do remember what they did with Cyprus banks, it’s a old (bad) story.

Anyway, at the moment its just a proposal and it still needs to be agreed by the EU member states and then approved by the European Parliament. So wait and see.


#17

I‘m not concerned, by the way. The BBVA study is from October 2016. I thought it might be interesting for people here to get a better understanding about e-money rules and regulations worldwide in terms of customer‘s funds protection.


#18

Hi Frank,
Sorry, I mistaken, my message just above was in fact for @QuQu not for you. Thanks.


#19

@KIMW

Old story? Hmmm depends on how old are you, but it happened in 2013 https://en.wikipedia.org/wiki/2012–13_Cypriot_financial_crisis