MSE News: PCF Bank to leave the UK market – what it means for your savings and loans

MSE_Petar

PCF Bank has stopped offering personal savings accounts and loans to new customers, and plans to exit the UK banking market – but there's no immediate change for existing savers or borrowers.

Read the full story:
'PCF Bank to leave the UK market – what it means for your savings and loans'

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DavMaca

PCF Bank have written to me and stated that they intend to force close my three year fixed rate bond.

When I opened the bond, I thought I had entered a strictly binding three year contract, which neither party could break without incuring punitive penalty charges.

So why are they offering to only pay me interest until the date of forced closure, with no mention of compensation payment, or offering to pay the full maturity interest on the bond on their elected date of forced closure.

Surely this has to be sharp practice on behalf of PCF who are breaching the banking code in force closing my account.

Are there any legally trained financial forumites who can advise on this deplorable conduct !

eskbanker

What if I don’t want to close my account?

If you do not want us to close your account, please contact us within 28 days of the date of the offer letter. This can be done by logging into your online banking and sending a secure message, by emailing us or contacting us by phone or in writing (using the contact details below) to enable us to understand your situation and discuss whether there are alternatives we can offer you to closure.

https://pcf.bank/savings-faqs/

ab56

Not had any communication from PCF about forced closure, however our bond due to mature at end of September 2023..... so perhaps not bothered to contact us.

Agree its a bit sharp practice if they are not offering to pay interest to original closure date or compensation.

dunstonh

When I opened the bond, I thought I had entered a strictly binding three year contract, which neither party could break without incuring punitive penalty charges.

Not correct.   There is provision in their T&Cs as there is for all FTDs.

25.8 We will not close your Term Deposit before the Maturity Date for our convenience. However, we may do so in exceptional circumstances as provided for in clause 12.6. 

12.6 We will ordinarily give you two months’ notice to close your Account and to end the Agreement, however in exceptional circumstances we may take action to close your Account immediately by giving you notice (unless we are not permitted to notify you). Such circumstances include, but are not limited to:
a) repeated or material breach of the terms and conditions of the Agreement by you;
b) where we reasonably suspect that you have given us false information at any time which may have an impact on the services we provide to you;
c) where we reasonably suspect that your Account is being used for an unlawful purpose;
d) where you behave in any abusive or threatening manner towards our staff;
e) where we reasonably determine, you were not or are no longer eligible to hold your Account (for example because you are using a personal Account for purposes connected with a business);
f) where we need to close your Account in order to comply with Applicable Law;
g) where a petition for bankruptcy is presented against you or you enter into a voluntary arrangement or any other arrangement for the benefit of your creditors;
h) where the Agreement is otherwise repudiated and cancelled or terminated; or
i) where we reasonably believe that maintaining your Account we may materially damage our reputation. 

F would be the reason as a firm cannot continue offering regulated financial products beyond the point they are regulated

So why are they offering to only pay me interest until the date of forced closure, with no mention of compensation payment, or offering to pay the full maturity interest on the bond on their elected date of forced closure.

Because you are not materially disadvantaged.  You can use the money to obtain a new FTD at a higher rate/

Surely this has to be sharp practice on behalf of PCF who are breaching the banking code in force closing my account.

What banking code do you think they are breaching?

Are there any legally trained financial forumites who can advise on this deplorable conduct !

Nothing deplorable about it.  They couldn't raise sufficient capital to continue trading in the UK, and they are exiting the UK in an orderly manner.     You are not worse off and are free to obtain a new product from the marketplace to replace it.

friolento

DavMaca said:

PCF Bank have written to me and stated that they intend to force close my three year fixed rate bond.

When I opened the bond, I thought I had entered a strictly binding three year contract, which neither party could break without incuring punitive penalty charges.

So why are they offering to only pay me interest until the date of forced closure, with no mention of compensation payment, or offering to pay the full maturity interest on the bond on their elected date of forced closure.

Surely this has to be sharp practice on behalf of PCF who are breaching the banking code in force closing my account.

Are there any legally trained financial forumites who can advise on this deplorable conduct !

what is the interest rate on your account, when did you take it out?

jimjames

DavMaca said:

So why are they offering to only pay me interest until the date of forced closure, with no mention of compensation payment, or offering to pay the full maturity interest on the bond on their elected date of forced closure.

Surely they're doing you a favour and you'll be able to obtain a much higher rate on the replacement so no compensation would be due

FishInGlass

I had the same email.

I have a 3yr fix at 1.26% maturing in November. The earlier I can get the money out the better.

Alp1ne

Should we be worried?  I was informed by them that they are acting on my behalf and they were concerned that they were paying me such low interest in current markets!  I would have thought that they would be rubbing their hands at only paying customers such low interest on fixed rate bonds taken out last year at such low rates. For a bank to be so concerned at making a profit is quite frankly unbelievable.  I'll believe it when my money is safely back in my current account.

masonic

Alp1ne said:

Should we be worried?  I was informed by them that they are acting on my behalf and they were concerned that they were paying me such low interest in current markets!  I would have thought that they would be rubbing their hands at only paying customers such low interest on fixed rate bonds taken out last year at such low rates. For a bank to be so concerned at making a profit is quite frankly unbelievable.  I'll believe it when my money is safely back in my current account.

They are pulling out of the UK savings/lending market altogether. PCF has been undergoing some difficulties as a company for a while. First its CEO resigned and then it tried and failed to raise growth capital. It delisted from the FTSE AIM market at the end of last year and has been winding down throughout 2023, following a period where it struggled with margins and new lending. This all happened prior to the massive hike in interest rates from historic lows. They might be kicking themselves now.

dunstonh

Alp1ne said:

Should we be worried?  I was informed by them that they are acting on my behalf and they were concerned that they were paying me such low interest in current markets!  I would have thought that they would be rubbing their hands at only paying customers such low interest on fixed rate bonds taken out last year at such low rates. For a bank to be so concerned at making a profit is quite frankly unbelievable.  I'll believe it when my money is safely back in my current account.

You seem to be missing the point that they are giving up their FCA authorisations and leaving the UK.

You also seem to be confused on how FTDs are funded.