Building society will pay back members who lost out in failed trust scheme
TO TAKE BACK LEGAL OWNERSHIP OF THEIR HOMES
HEARTBROKEN Nottingham Building Society members whose homes and life savings were put at risk when a trust scheme collapsed will be reimbursed.
The Nottingham will pay customers who lost their investments and offer them further financial support after they were referred to a trust scheme which ultimately put their property and savings at risk.
From 2011 to 2017, the society received commissions for sending elderly customers to the Will Writing Company (WWC), which gave them advice on writing wills and how to put property and cash into trusts. WWC and its sister enterprise the Family Trust Corporation then went bust in 2018, with their assets and database acquired by the Philips Trust Corporation (PTC) - which the Nottingham Building Society had no relationship with.
After getting trust holders to transfer their assets over, PTC itself went into administration in 2022, forcing customers and their relatives into costly and lengthy battles to take back legal ownership of their own homes and putting hundreds of thousands of pounds in jeopardy.
Nottingham Building Society chief exec Sue Hayes has now outlined how those affected will receive substantial financial support, which will come as welcome news to many members who had blamed the society for initially introducing people to PTC’S predecessor.
Nottingham Building Society has pledged to re-establish 100 per cent of its members’ investments that had been held by the PTC, provide up to £2,400 towards the costs of those who have had to recover property from the failed PTC trusts, and contribute to replacing PTC for those with a small number of investment-only trusts. “Members impacted by the actions and administration of Philips Trust have experienced a terrible chain of events and we hope today’s announcement provides some comfort,” Ms Hayes, head of Nottingham Building Society, said.
“As a mutual, we want to stand behind those members and we believe our whole community would wish us to do so. We believe the significant financial support outlined today achieves that whilst balancing the interest of the wider membership.
“We have been working hard for a number of months to unravel the facts in this hugely complex situation. We would like to thank the many members who have supported our enquiries. We have been deeply saddened and frustrated to hear their stories and are truly sorry they have ended up in this position.”
Customers do not need to take any action at the moment, the society added. It explained more work would have to be done in partnership with PTC’S administrator Kroll before payments were finalised. It expects to update those affected by the end of the month.
Ms Hayes added: “Our focus now is on providing these voluntary payments as quickly as possible. Alongside others, we will continue to support action to hold Philips Trust to account.”
The FCA, which regulates building societies, had been investigating the conduct of Nottingham Building Society and nine others over introducing customers to the unregulated trust schemes. However in March this year, it concluded the introduction of customers to the trust schemes was not within its Government-defined remit.
The authority praised the decision of Nottingham Building Society, as well as Leeds and Newcastle’s mutuals, to help their members financially.
“We have spoken to the Building Societies Association and the building societies involved as they developed this proposal and welcome the voluntary steps taken,” a spokesperson said.