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Pre-paid cards 'not covered by FSCS'

The FSCS has reminded consumers that pre-paid cards are not covered under its remit.

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22 September 2011

Pre-paid cards 'not covered by FSCS'”

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The Financial Services Compensation Scheme (FSCS) has urged firms to remember that pre-paid cards are not within the scheme's remit.

The FSCS pointed out that if the provider of a pre-paid card or an e-payment card goes bust, then cardholders will lose all their money and will not be eligible for protection.

Mark Neale, chief executive of the FSCS, said that although pre-paid cards have become increasingly popular among consumers - especially among those that are unable to get standard bank accounts with debit or credit cards - people should conduct proper thorough research before applying for them.

"Before taking out any products, consumers should ensure they should visit our website or ask the provider about FSCS protection," he said.

According to consumer publication Which?, pre-paid cards are typically used by consumers for holidays, school trips and managing household finances.

Budget airline Ryanair recently announced the launch of its new Ryanair Cash Passport pre-paid card.

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