Philips Trust: Building societies to make 'meaningful' payments to customers caught up in £138m scandal

More than 2,000 people have been impacted by the collapse of Philips Trust Corporation (PTC), which was holding £138m of assets made up of homes held in trust and life saving investments when it went into administration in 2022.

All of the assets held by PTC belonged to customers at a variety of building societies who had initially invested after being introduced to unregulated advisers from predecessor firms of Philips Trust by the mutuals they banked with.

While control of the majority of homes has now been returned to customers, administrators are struggling to recover millions in savings which PTC had moved into high-risk funds.

It means many victims feared they would lose everything.

The level of individual losses from the £44m of affected savings is not yet known, with the administration process ongoing.

But Leeds Building Society (LBS) and Nottingham Building Society have confirmed they are planning to provide financial support to affected victims, with details expected to be announced in coming weeks.

Newcastle Building Society said it is also “considering” the move. The position of several other smaller building societies also involved is unknown.

It comes 10 months after The Yorkshire Post first began covering the issue after being contacted by “despairing” LBS customers who were being refused compensation on the grounds the agreements were “independent” of the society.

On Thursday, LBS chief executive Richard Fearon confirmed to the mutual’s AGM that financial support will be provided.

The meeting was also told that the amount of LBS-linked victims “numbers fewer than 200” with their assets making up “less than a quarter” of the £44m of affected savings.

George Moore, one of the LBS victims, attended the AGM and said of the announcement: “People came out of the meeting feeling a lot more positive than they have done in the last couple of years. It is a step."

An LBS spokesperson said: “This has been an extremely difficult and stressful time for the families impacted and we are deeply saddened that people are in this horrible situation.

"While the society doesn’t have any legal or regulatory liability for what has ultimately happened, as a purpose-led, member-owned organisation we will voluntarily offer meaningful financial support to impacted members.”

Nottingham Building Society said around 200 of its members have been affected, with their investments covering around one-quarter of the affected £44m.

A spokesperson for Nottingham Building Society said: “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."

A Newcastle Building Society spokesperson said: “Even though there is no legal or regulatory liability on the society’s part, we are considering how we may be able to provide meaningful financial support to our affected customers.”

What the building societies have said in full

A Leeds Building Society spokesperson said: “This has been an extremely difficult and stressful time for the families impacted and we are deeply saddened that people are in this horrible situation.

“We have continued to work with the administrators of Philips Trust Corporation over recent weeks and currently believe there are fewer than 200 customers who we originally referred to the Will Writing Company that have subsequently been affected by the likely investment losses caused by the actions of Philips Trust Corporation.

“We estimate that these members’ assets make up less than a quarter of the £44m which Philips Trust Corporation moved into high-risk investment funds.

“While the Society doesn’t have any legal or regulatory liability for what has ultimately happened, as a purpose-led, member-owned organisation we will voluntarily offer meaningful financial support to impacted members.

“This remains a complex issue with lots of moving parts but we are working hard to implement this, while also ensuring that we consider the interests of the wider membership as a whole in our decision making.

“We plan to provide further details within the next few weeks. We are liaising with other building societies who are also working with Philips Trust Corporation’s administrator.”

A spokesperson for Nottingham Building Society said: “We have followed the Philips Trust issue closely 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.

“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.

“Based on our knowledge to date we understand there are approximately 200 members that have been affected by the likely investment losses caused by the actions of Philips Trust Corporation. We believe based on the information we currently have that these members’ assets make up approximately a quarter of the £44m.”

A Newcastle Building Society spokesperson said: “The Society is very concerned by, and sympathetic to, the difficult situation faced by people who have been affected by Philips Trust Corporation.

“We are continuing to engage with the administrators, Kroll, to better understand the impact on those affected and their next steps. Even though there is no legal or regulatory liability on the Society’s part, we are considering how we may be able to provide meaningful financial support to our affected customers. Any support would be on a voluntary basis.

“We will provide further updates when we are in a position to do so. In the meantime we will continue to work with Kroll, as well as assisting any efforts to bring to justice those who were responsible for these losses.”

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