Thanks for this blog post. I do find this a confusing area and have a few questions related to some passages in the blog (quoted below). Some of these relate to regulation or insurance in general. Some are specific to Dozens.
The money you see in the Spend section is all part of your current account. This money is securely held in a segregated account at a UK high street bank in accordance with the FCA requirements and the Electronic Money Regulations 2011. This means that dozens has no access to your money for its own purposes. For this reason, unlike with some other current accounts, FSCS protection is not considered necessary as the money does not leave the segregated account and is separate from dozens’ finances in case of default.
Which high street bank?
Is there an intermediary between Dozens and the high street bank? My impression is several new app-based account providers use more established emoney providers like PFS (Prepaid Financial Services) as an intermediary.
As I understand it, safeguarding should work effectively if the requirements are met. However, there does not seem to be any insurance against requirements not being properly met perhaps due to poor administration, negligent or fraudulent activity at the firms involved. This leads me to feel that a safeguarded account is not quite as safe as an FSCS-protected account. Would appreciate comment on this.
How often do the FCA (or appropriate body) audit compliance with safeguarding requirements?
Assuming safeguarding requirements have been met I’m happy to believe my money would be safe if the emoney institution went bust. But it’s always been unclear to me what happens if the bank holding the safeguarded account were to go bust. Some emoney providers suggest FSCS protection would kick in if this were to happen, whilst others seem to avoid making this claim. Some 3rd party consumer news/information sites claim your money may not be protected, e.g. here. It’s hard to know which source to believe. Is there a FCA document which outlines what would happen if the bank holding the safeguarded account of the emoney institution went bust?
Your Cash Savings can be found at the top of the SAVE section. These are covered by the Financial Services Compensation Scheme (FSCS) for up to £85,000. Please be aware any bonds you invest in are not part of cash savings.
What do I need to type in at the link below to confirm this?
Typing in “Dozens” produces no results
It’s interesting that you have chosen to cover the spend section with safeguarding and the save section with insurance, rather than the same approach for both. Would be interested in any comment on this.