Building society is to pay customers ‘duped’ by scheme that risked savings

IT REFERRED SAVERS TO TRUST THAT WENT BUST

NOTTINGHAM Building Society customers left heartbroken by an unregulated trust programme that put their homes and life savings at risk will receive significant payments from the mutual.

The Nottingham has said it will soon provide “meaningful financial support” to some of its members after they were referred to a trust scheme which ultimately put their homes and investments in danger.

From 2011 to 2017, the society had a referral agreement with the Will Writing Company and received commission for sending elderly customers to them for support and advice with writing wills and putting property and savings into trusts. The Will Writing Company went bust in 2018, and the firm and its sister enterprise the Family Trust Corporation’s assets and database were acquired by the Philips Trust Corporation (PTC).

After writing to trust holders, telling them to switch over, the Philips Trust Corporation itself went into administration in 2022. Ever since, customers and their relatives have blamed the building society for initially introducing older members to the Family Trust Corporation, with some “duped” families forced to fight to take back legal ownership of their own homes after its buyer went bust.

At Nottingham Building Society’s annual general meeting on Wednesday, April 24, directors confirmed significant payments would voluntarily be made to those impacted by the failed trust scheme. The mutual reiterated it never had any relationship with the PTC and was not legally obliged to support its members directly in this way, adding that further details would be provided to affected members in the coming weeks.

“We have been closely monitoring the Philips Trust issue and have been deeply saddened and frustrated to learn that a number of our members have faced financial loss as a result of what happened,” a Nottingham Building Society spokesperson said.

“We have been working hard for some months now to better understand the situation and how we can support our members. We’d like to thank members who have shared their stories with us and helped us work through this complex issue.

“We can confirm that we will be providing impacted members with meaningful financial support, and will be in a position to confirm details of this shortly. We are doing so on a voluntary basis. Although we have never had any relationship with the Philips Trust Corporation, and we have no legal or regulatory requirement to do so, as a mutual building society we are committed to taking action to help our members who have been affected by this, whilst balancing the needs of our wider membership.”

Philips Trust Action Group (PTAG), a collective of customers who were advised to set up the doomed trusts and their relatives, welcomed the confirmation of financial support but encouraged the Nottingham Building Society to further engage with members over the arrangement. “Whilst the PTAG appreciate ‘meaningful financial support’ is on its way, we would encourage the Nottingham Building Society to engage with the creditors’ committee [of the Philips Trust Corporation] or PTAG prior to an announcement, in order for them to negotiate on behalf of the impacted members to reach a fair and acceptable conclusion and not accept a fait accompli,” the group said.

“Members have the right to meaningful communication with their society. We also hope that the meaningful financial support takes into account the emotional distress caused to victims and their wider families.”

The FCA, which regulates building societies, had been investigating the conduct of Nottingham Building Society and nine others over introducing customers to the unregulated trusts. However in March this year, it concluded the introduction of customers to the trust schemes was not within its Governmentdefined remit.