Leeds, Nottingham and Newcastle building societies paying over £40m to victims of Philips Trust Corporation scandal
A group of top building societies are repaying more than £40m to hundreds of customers who were victims of a major investment scandal which put their life savings and homes at risk.
Nottingham Building Society announced yesterday it is paying out £11.2m, following on from financial announcements in recent days from Leeds Building Society of its £10.3m commitment and Newcastle Building Society saying it has set aside £20m for the voluntary payments to customers affected by the collapse of a company called Philips Trust Corporation (PTC).
The three mutuals, along with Saffron Building Society which is due to reveal its payment figure later this month, decided last year to voluntarily reimburse almost 700 affected customers despite having no legal or regulatory obligation to do so. It followed The Yorkshire Post and other media highlighting the stories of victims who had been campaigning for compensation.
The societies and six other smaller mutuals had introduced hundreds of customers to unregulated advisers who sold them family trusts linked to properties and investment schemes for their savings which then became mired in financial complications.
The assets ultimately ended up in the hands of PTC. It collapsed in 2022 while holding £138m of 2,300 building society customers’ assets including properties in trust and £44m worth of invested savings.
Administrators then struggled to recover millions in savings which PTC had passed on to high-risk “investment management” firms, several of which had themselves collapsed. It had left those affected fearing they would lose everything – eventually leading to the announcement of the voluntary repayment scheme.
Among those affected were two brothers from Dewsbury after the £180,000 proceeds from the sale of their late mother’s house were used by PTC to pay off other debts rather than being returned to them. Leeds Building Society has confirmed it is refunding the full amount.
Newcastle Building Society highlighted the payments as the key reason that its £15.7m profits before tax for 2024 were 46 per cent down on the £29.1m recorded the year before.
Chief executive Andrew Haigh said: “As we began to understand the scale of the impact on members, even though the society had no responsibility for, nor involvement in these actions, nor did we have any legal or regulatory obligation to offer support, we chose to offer voluntary support to the members involved. The strength of the society and underlying performance during the year ensured that we were able to set aside a sum of £20m to provide this support.
“We believe that these actions are entirely consistent with the principles of the society and the wider mutual movement, in supporting members through such a time of difficulty.”
Under the agreement, the societies are due to receive money back from administrators depending on what can be recovered, with the administration process due to end next year. Nottingham’s 2024 accounts listed an initial recovery of £1m.
A Nottingham Building Society spokesperson said: “This £1m recovery figure sum is NBS's share of the amount returned to the building societies from Kroll at the end of 2024 relating to the recovery of one of the PTC funds, the Woodville fund.
"We are pleased to have been able to support those of our customers impacted by Philips Trust.
"We think it is unlikely that we will see any significant recoveries from the administration process but we continue to be in contact with the administrators as they work through this.”
A spokesperson for the Philips Trust Action Group, made up of affected victims and family members, said: "Had it not been for the relentless coverage by The Yorkshire Post and other media outlets – whose reporting played a crucial role in embarrassing the building societies into doing the right thing – these voluntary financial settlements may never have materialised.”