# What FOS and FSCS cover — and why business loans usually don’t qualify

*Source: https://credicorp.co.uk/support/what-fos-and-fscs-cover/*

The Financial Ombudsman Service and the Financial Services Compensation Scheme are two pillars of consumer financial protection in the UK. Many people assume they cover all financial products. They do not. This article explains what each one is, who they protect, and why a business loan to a company usually falls outside both.

## What the FOS is

The Financial Ombudsman Service (FOS) is a free, independent service that resolves disputes between financial firms and their customers. If a customer has complained to a firm and is not satisfied with the outcome, eligible customers can ask the FOS to review the complaint. The FOS can direct a firm to put things right, and its decisions are binding on the firm if the customer accepts them.

The key word is **eligible**. The FOS covers regulated financial activities and a defined set of customers — principally consumers and certain small businesses, micro-enterprises and other defined groups, in relation to activities that fall within its jurisdiction. It is not an open door for every financial dispute.

## What the FSCS is

The Financial Services Compensation Scheme (FSCS) is the UK’s statutory “lifeboat”. It pays compensation, up to set limits, when an authorised financial firm fails and cannot meet claims against it — for example, protecting deposits in a failed bank up to a cap. Like the FOS, the FSCS covers specific regulated activities and specific categories of claimant; it is not blanket cover for any money you might lose.

## Why business loans usually fall outside both

Both schemes are built around **regulated** activity and, largely, around protecting **individuals** and certain small enterprises in defined circumstances. A loan made to a limited company or LLP for business purposes is generally not a regulated consumer-credit agreement at all, because a company is a [body corporate](/support/what-is-a-body-corporate/) rather than an individual, under **Article 60B FSMA RAO 2001**. We explain that line in full in [regulated vs unregulated business loans](/support/regulated-vs-unregulated-business-loans/).

Because the lending sits outside the consumer-credit regime, the consumer safety net built on top of it does not apply. To be clear about our own product: a Credicorp business loan is **not** covered by the FOS, is **not** covered by the FSCS, and is **not** covered by the Business Banking Resolution Service (BBRS). We are not FCA-authorised for consumer-credit lending, and we do not imply that any of these schemes stand behind this borrowing.

## So what is your route if something goes wrong?

You are not without recourse — the route is just different. If you have a problem, you raise it through our internal complaints process. We take complaints seriously, investigate them, and aim to put things right where we have got something wrong. You can see how to do that on our [feedback and complaints page](/feedback-and-complaints/), and the step-by-step is in [making a complaint: options and process](/support/making-a-complaint-options-and-process/).

If a complaint cannot be resolved through our internal process, the final escalation is the **courts**, rather than an ombudsman. That is a genuine difference from a regulated consumer loan, and we would rather you knew it up front than discovered it later.

## Free help is still available

Separately from any complaint, if your business is struggling with repayments there is free, independent help. For the business, you can contact Business Debtline (businessdebtline.org), the Federation of Small Businesses (fsb.org.uk), or explore HMRC Time to Pay arrangements at gov.uk. If you, as a director, are struggling personally, free services such as StepChange (stepchange.org) and Citizens Advice (citizensadvice.org.uk) can help.

## The bottom line

The FOS and the FSCS are valuable, but they are tied to regulated activity and defined claimants. A business loan to a company usually falls outside both. Knowing that lets you weigh the protections you do and do not have, and reminds you to choose a lender on how transparently and fairly it behaves — because on an unregulated loan, that is what you are relying on.

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Credicorp Limited — UK lender to limited companies (Company No. 16093826). credicorp.co.uk