Not sure how this got missed but its unbelievably worrying that Chips T&Cs explicitly state (multiple times) that their product is not covered under the FSCS. This may be in relation to the main Chip product but there doesn’t appear to be a mention of the +1 or HTB account.
Obviously this was a big selling point for the new products (and the reason why I actually started saving with Chip again) but at the end of the day, our rights would be applied as laid out in the Terms and Conditions.
Right now, this states that we have no rights if the worst was to happen.
If I am missing something then I would love it to be cleared up, as it’s a great application, but this is very concerning.
T&C’s below from https://www.getchip.uk/terms
Short of time?
Chip is our app. We use other firms who specialise in securely connecting us to your bank account, so that we can look at transaction data to calculate little amounts to put aside and offer you a range of features and products.
We use another firm to take debit card payments from your account. Your money is sent to an authorised e-money issuer who will provide you with a digital wallet and safeguard your money. Together this makes up the system behind the app.
Some of the things Chip does are regulated by the FCA, but none of the services that we offer to you are covered by the Financial Services Compensation Scheme.
The basic Chip product has no monthly fee and we have some premium services that we hope you will like. You can stop using Chip at any time.
9.3 The Wallet Provider is obliged to safeguard your money, which they will do by placing funds into a segregated account. If Chip ceases to trade, or becomes insolvent, the Wallet Provider will arrange for the redemption of the electronic money in your Wallet. If the Wallet Provider ceases to trade, or becomes insolvent, Chip will make claims for the redemption of your electronic money on your behalf. Even though your funds are segregated, you should know that your money is pooled with money belonging to other Chip users and other clients of the Wallet Provider, which means that if the Wallet Provider is unable to redeem the funds in your Wallet, your claim will not be against a specific account but against the pool in general and an insolvency practitioner’s costs of distributing the safeguarded funds would be paid in priority to your claim. There is no FSCS protection.
9.4 As an FCA Authorised Payment Institution Chip also safeguards funds in relation to payment services in our safeguarded account with Clearbank Ltd. ClearBank Ltd is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register number: 754568). Even though your funds are segregated, you should know that your money may be pooled with money belonging to other Chip users, which means that if Chip fails, your claim will against the pool in general and an insolvency practioner’s costs of distributing the safeguarded funds would be paid in priority to your claim. There is no FSCS protection.