Building societies consider voluntary payments to victims of £138m Philips Trust scandal

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 passed on to “investment management” firms – leaving many victims fearing they will lose everything.

The level of individual losses is not yet known with the administration process due to run until 2026.

The Building Societies Association has confirmed a number of mutuals involved are “considering whether they may be able to provide some support to affected customers on a voluntary basis”.

Both Leeds and Nottingham Building Societies have confirmed to this newspaper that they are in discussions with PTC administrator Kroll about potential help for customers after the Financial Conduct Authority revealed “early stage” discussions were happening.

Details of what form any “support” could take have not been explained publicly by any party involved and it is unclear to what extent any possible financial payments would cover confirmed losses.

But The Yorkshire Post understands at least one building society is considering making some form of financial payment to affected customers.

The FCA announced on Friday it would not investigate the role of building societies in the matter because the original introductions made by building societies were not regulated activities. The FCA also said it could not hold building societies responsible for investment losses caused by the actions of PTC, which did not exist at the point when mutuals were making referrals.

A Leeds Building Society spokesperson said: “We’re in contact with the administrators of Philips Trust to understand more about the expected investment losses they have identified in recent weeks.

“We’re seeking to find out how many people affected by those losses were referred by the society and subsequently set up a trust which later transferred to Philips Trust. We’re doing this to better identify whether we may be able to support those customers impacted on a voluntary basis.”

A spokesperson for Nottingham Building Society said: “We recognise this continues to be a very difficult matter for the customers impacted.

“We have been working closely with the administrators, Kroll, to better understand the number of our members affected and to what extent, in order to ascertain how we may be able to help on a voluntary basis.

“As a mutual building society, we have a responsibility to balance the interests of impacted customers with the best interests of our overall membership.

“As the FCA note it was ‘the actions of PTC, not the building societies, which caused customers to experience investment losses.' Having said this, we are investigating ways in which we can help impacted members on a voluntary basis whilst taking into account the rest of the membership."

A spokesperson for the Philips Trust Action Group of affected victims said: “Whilst we see this as a positive step by the Building Societies involved, we would actively encourage the Building Societies to engage with their members and offer compensation as a matter of urgency. Time is a benefit not afforded to their many elderly clients. They need action and they need it now.

“PTAG welcomes the opportunity to discuss with the Building Societies their offer of support on a ‘voluntary basis’ and establish how this could benefit their clients.

“We encourage all Building Societies involved to follow suit.”