Your money is protected through 'safeguarding' and not through the Financial Services Compensation Scheme (FSCS).
What does this mean?
As your Telleroo account isn’t a bank account, we do not take your money as a deposit to use for our own purposes or lend to other customers like many banks; and as your funds are not held in a bank account they are not covered by the FSCS protection that you get with a bank account.
So how is my e-money account protected?
To ensure your money is safe we follow a process known as ‘safeguarding’ which is a regulatory requirement for all e-money institutions.
In this process, we keep your money separate from our own money and place it in a safeguarding account with a separate bank. We have to have an independent expert check to ensure that we are meeting our safeguarding obligations every year and the expert’s report confirming this is available to the FCA on request.
This protection continues to be in place in the event of Telleroo or our sponsor, Moorwand going out of business; this is because that money will continue to be held by the bank and be available for you, and will not be available to third parties.
In more detail....
In the event that both parties (Telleroo & our sponsor, Moorwand) go out of business, an insolvency practitioner would be appointed to return the funds we have safeguarded to our customers. This means you would get most of your money back, except for the costs deducted by the insolvency practitioner for distributing the money to our customers. In addition, due to the insolvency process, it could take longer for money to be returned to you than if the account was held by a bank.
More information about using a non-bank payment service provider and the protections they offer can be found on the FCA’s website at https://www.fca.org.uk/consumers/using-payment-service-providers