Icesave – loss of interest – FSCS renege on Treasury undertaking

innovate

Fantastic that so many posters do not think they should be complaining! In the circumstances, I am quite aghast that someone would "urge" people to make formal complaints.

Add me to the ones who are utterly greatful that I don't need to barter with a bancrupt state over money they probably would never pay us.

We haven't quite got our money yet, but it looks very likely that the Treasury and the FSCS will have deserved nothing but praise over the handling of this affair.

cwcw

I'm very happy to be getting my money back and am willing to take the hit of a couple of months interest lost as a lesson learned for the future - avoid passport scheme banks at all costs.

However, one thing that does seem unfair is that fixed term bond accounts can choose to leave their deposits with the FSCS and continue earning a high rate of interest on them beyond the point of default to the point of expiry. It does seem a little like one rule for one, another for another. All sets of accounts should be treated equally.

orangecat

I am also pleased that we will have all our money back, but bearing in mind that the U.K Goverment knew that Icelandic Banks were struggling as far back as last April, and depositing money on trust is not risk taking as with stocks and shares. I my view no one is doing me any favour, I was covered by the E.U Passport scheme along with the F.S.C.A. If this was not the case, I would never have placed my money in this E.U Passport scheme or trust any obligations made by continental countries who are members of the E.U. Never again.

witchard

dillydilly wrote: »

I think the OP has a fair point. The reason the govt guaranteed all savings was not a cynical ploy to gain votes, it was because they understand that an efficient financial system, which underlies the economic wealth of this country, is based on financial confidence whereby people can trust with 100% confidence that savings on deposit with the approval of the UK authorities are safe. Take away this trust and confidence and the financial system collapses, as does any chance of future economic wealth. Of course people have lost money - the money they could have earnt had their savings been in another bank account. There are two precedents - the interest being earned on Icesave fixed bonds and the interest earned after KE accounts were transferred to Ing. Investing in Icesave prior to the collapse was no more risk taking than investing in HSBC given the authorities were happy with the passport arrangement - even Which magazine had it as their best buy savings account in its September edition, I hardly think you can blame the savers as taking excessive risks. I was getting 6.25% on my savings - hardly excessive...

and looking again at Darling's words, when asked why then he won't commit to a 100% guarantee on all savings, his response was that you can judge him by his actions - ie. they would do exactly this again if it happened to any other bank, as they subsequently did with KE - transferred the accounts but Ing wouldn't have accepted them for nothing... the reason it's dangerous to give a 100% guarantees is that it encourages excessive risk taking by financial institutions, on the grounds that they won't have to take any consequences if it all goes belly up. The govt have made it quite clear however that 'no UK saver will lose their savings' - effectively a 100% guarantee. You watch - if a £50k covered bank goes Ts up, they'll cover all their savings too - though its easier to get them absorbed into a larger institution.

You have hit the nail on the head. I’m glad some one understands the situation. A few others have mentioned a second reason for making a claim.

The decision of the FSCS to allow depositors with fixed bonds to have the option to receive interest at maturity (and thus not to lose any interest) is divisive, unfair and inequitable.

Depositors with non fixed bond accounts will lose interest from the date of default to the date of payment of compensation. Depositors with fixed bond accounts will lose nothing.

The statement made by the Chancellor in the House of Commons is quite clear ‘no retail depositor will lose any money as a result of the closure of Icesave’. The Chancellor did not say, no fixed bond account holders will lose any money, but all other account holders will lose money.

If the Chancellor/Treasury states that ‘no retail depositor will lose any money as a result of the closure of Icesave’, then the FSCS should alpply that undertaking to all account holders. It is wrong, unfair, and inequitable for the FSCS to apply it only to fixed bond account holders.

If you choose not to make a claim for loss of interest, that is your choice.

Icesaver

innovate wrote: »

Fantastic that so many posters do not think they should be complaining! In the circumstances, I am quite aghast that someone would "urge" people to make formal complaints.
.

Agreed
Maybe those who feel so strongly about the loss of interest for 4-6 weeks would like to direct their efforts into suggesting to the FSCS, treasury, MP GB or AD that all depositers with Icesave should have their lost interest distributed amongst the charities that have not had their investments protected in the same way we have.:D

cloud_dog

I know we can 'Thank' a post but sometimes I just wish I could vote a post/thread down :mad:

Dylanwing

Was the OP actually serious? If so, clearly an exceptionally ungrateful and selfish individual.

altocumulus

Dylanwing wrote: »

Was the OP actually serious? If so, clearly an exceptionally ungrateful and selfish individual.

The OP had a valid point to make, and expressed his/her opinion on the wordings of the FSCS/Government promises....


I, like others here, are jolly grateful that Icesave deposits are being refunded in excess of the legal requirements and at a faster speed than expected.:j:beer:

However, this doesn't make me love Darling/Brown....that is asking just a wee bittie to much.... :A

EalingSaver

witchard wrote: »

A few others have mentioned a second reason for making a claim.

The decision of the FSCS to allow depositors with fixed bonds to have the option to receive interest at maturity (and thus not to lose any interest) is divisive, unfair and inequitable.

Depositors with non fixed bond accounts will lose interest from the date of default to the date of payment of compensation. Depositors with fixed bond accounts will lose nothing.
....
It is wrong, unfair, and inequitable for the FSCS to apply it only to fixed bond account holders.

I did find that bit surprising. As I posted on another thread, before I discovered the reason, I seriously questioned whether the pyament of interest through to maturity was a correct interpretation of what was going to happen. I said then that I would be staggerred if the authorities had any legal obligation, and certainly didn't feel they had any moral obligation, to honour rates on term deposits beyond the point of the banks default, (even in the more straightforward case that this had been a UK bank fully covered under the FSCS rather than the passport scheme).

However, someone pointed out to me that this was the terms of the FSCS cover, and pointed me to the appropriate para. Therefore I see the apparently contradictory nature of the treatment of instant accounts versus term deposits as a quirk of the FSCS scheme, and one which anyone with term deposits should be very very grateful for; as grateful as we should all be that the authorities chose to both treat the failure as if we had been fully covered and not b*****d up by the iceland part, and to go further and cover retail deposits above £50k.

So I for one - and I don't have a term deposit with them - choose to see this as an 'anomoly' as a consequence of invoking FSCS cover for the whole amount which is an additional cherry on the cake for those with term deposits; and NOT as a reason that I should be any less grateful for GETTING MY CAPITAL BACK with interest up to the point of defualt, probably sooner than expected, when for a horrible while there was the possibility of losing roughly the first £16k of mine, and another £16k of my OHs, precious savings.

Judging by the bulk of the posts here, that appears to be the majority view.

home_alone

The Icelandic Governnent has been rather quiet over the last week or two, do you think I get could get back my lost interest in smoked cod, love smoked cod.

gary