Icesave – loss of interest – FSCS renege on Treasury undertaking

witchard

8 October 2008 – Statement by Chancellor and Treasury

‘The UK authorities expect that Landsbanki will soon be declared in default. Should that occur, the Chancellor has put in place arrangements to ensure that no retail depositor will lose any money as a result of the closure of Icesave.’

8 October 2008 Treasury statement (paragraph 2)
http://www.hm-treasury.gov.uk/press_101_08.htm

8October 2008 Statement of Chancellor - House of commons (paragraph 56)
http://www.hm-treasury.gov.uk/statement_chx_081008.htm

The Treasury statement is quite clear. No retail depositor will lose any money as a result of the collapse of Icesave. The FSCS has reneged on this undertaking.

The FSCS has decided not to pay interest on deposits (other than those with fixed bonds) from the date of default (8 October 2008) until the date compensation is paid. As a result retail depositors will lose money as a result of the collapse of Icesave.

Under the FSCS compensation (including interest) is payable on deposits of up to £50000 to the date of default. But the statement by the Treasury provides further compensation to retail depositors to cover deposits in excess of £50000 and interest on deposits until the date of payment of compensation. Retail depositors will lose money as a result of the collapse of Icesave if the FSCS does not pay interest on deposits up to the date compensation is paid.

The decision of FSCS not to pay interest on deposits from the date of default to the date of payment of compensation is quite clearly not in accordance with the Treasury’s undertaking that no retail depositor will lose any money as a result of the collapse of Icesave.

I urge readers to write to the FSCS, make a formal complaint, and seek recovery of interest in accordance with the Treasury’s undertaking.

Reaper

You won't lose any money, you just won't gain any extra.

The phrase "Don't look a gift horse in the mouth" springs to mind.

SGE1

I think you're playing on words here. 'Not losing any money' can be interpreted as receiving no less than the amount you originally invested, far more easily that it can be interpreted as guaranteeing that interest will also be paid.

I won't be complaining, the FSCS has enough to deal with at the moment. I'm just glad they're compensating everyone (remember, the Government had no legal obligation to do this), and I regarding losing 1 1/2 months' interest as not that big a deal.

MarkFromCornwall

witchard wrote: »

I urge readers to write to the FSCS, make a formal complaint, and seek recovery of interest in accordance with the Treasury’s undertaking.

If I get my savings back I'll be very relieved. If I get interest on my savings up to the default date I'll be delighted. It looks as if all this is going to happen quicker than I expected and so far I'm impressed with FSCS. I certainly won't be complaining. Remember, the first part of our money was, supposedly, guaranteed by the Icelandic authorities, and we are lucky not to have lost that.

Just my opinion,
Mark.

LGG_2

and I regarding losing 1 1/2 months' interest as not that big a deal.

yeah its annoying ill prob lose 100-£200 depending on how long it takes but heck it could have been alot worse. small mercies and all that

cos69

The FSA / FSCS are following their published guidelines and so far its all gone a lot faster and smooother than I thought it would. With Iceland failing to keep up their part of the compensation I am just pleased to get my money within 6 weeks - let alone 3 months or 6 months. So far, looking good.
:beer:

£$&*"($£&(

I agree with the previous posts - we should consider ourselves very lucky to get any part of the first 16,000 or the money over 50,000. Complaining about a month or two of interest seems quite petty in the grand scheme of things.

Plasticman

witchard wrote: »

The Treasury statement is quite clear. No retail depositor will lose any money as a result of the collapse of Icesave.

You haven't lost any money. You may not have earned any interest since the date of default, but you didn't ever have this money to lose. I'm just pleased to be getting compensated for the loss of my money.

Pendle_Gazza

I think the authorities have already gone well beyond the call of duty, and most of us are well suited with the outcome and organisation - despite the "loss" of interest.

So, if it's all the same to you, I don't feel the need to write to them at all, and will happily let them get on with helping me get back my already agreed amount.

SeanW

At one point in October, we could have all lost up to £16000. Some could have lost a lot more. Our government has arranged for us to be compensated the full £16000 they where not obliged to do and everything above £50000 they where not obliged to do.

Now you complain we won't get interest for 1 - 2 months While this is a big loss to some, we should be thankful for the deposits and interest on the above.

rathernot

witchard wrote: »

I urge readers to write to the FSCS, make a formal complaint, and seek recovery of interest in accordance with the Treasury’s undertaking.

Presumably you'll be doing this and will be content if they suggest you seek the return of the first £16,000 or so of your money directly from the Icelandic authorities?

Sorry but you need to look at the situation you could have found yourself in, the situation you are in and, well, get real basically.

I have around £38k in Icesave, trust me when I say I couldn't give a rats !!! about a months lost interest - it'd cost me more than that to learn to speak Icelandic to try and recover my money.