FSCS warns of lack of protection of pre-paid cards
September 29th, 2011 by elisa

The Financial Services Compensation Scheme (FSCS) is warning consumers using pre-paid cards that they are not protected by the financial compensation scheme if the card provider goes bust.

Ryanair announced last week that it was launching its own MasterCard, which will be the only way for customers to avoid paying an administration fee when they book flights, however this card is also not protected.

There is a trend for holiday-makers to use pre-paid cards as an alternative to credit cards and travellers cheques overseas. They can load them with the amount of local currency they want, making it easier for them to budget for their holiday.

FSCS chief executive Mark Neale told The Times: “Those people who already have a card, or are considering getting one, should be aware that they are not covered by the FSCS.

“This means that if the provider goes bust then cardholders will lose all of the money on their card and will not be eligible for protection.”

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