Newcastle Building Society backs potential police probe into £138m investment scandal
Newcastle Building Society says it will support any potential police investigation into the Philips Trust Corporation (PTC) scandal which has led to it paying affected customers £20m.
The society’s voluntary payments come in conjunction to Leeds Building Society paying £10.3m and Nottingham Building Society providing £11.2m to members affected by the collapse of PTC.
The societies and seven 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.
After its collapse, a PTC director admitted there had been “co-mingling, pooling and mistreatment of client monies” by the firm.
In a statement in Newcastle Building Society’s 2024 results which outlined the £20m payments being made to affected members, the mutual’s chief executive Andrew Haigh said: “We will continue to offer support to any current or future police investigation which aims to hold those responsible to account.”
Greater Manchester Police said in 2023 it was pausing its investigation as the administration process for PTC continues. The administration is due to last until next year. GMP said it would only consider reopening an investigation if administrator Kroll provided the force with potential evidence of criminality.
Last year a GMP spokesperson told The Yorkshire Post: “Intervention at this stage by GMP is likely to stall the investigatory process. Should the insolvency practitioner discover any evidence of criminality, this will be reported to the police.”
Kroll said at the time its administrators “continue to make themselves available to any and all enforcement authorities concerned” in the “complicated and ongoing” matter.
Following the new statement by Newcastle Building Society, Kroll confirmed to The Yorkshire Post that the position has not changed.
A spokesperson for the Philips Trust Action Group, made up of affected victims and their family members, gave a qualified welcome to the society’s statement but took issue with its statement that it had no involvement in or responsibility for what transpired.
The spokesperson said: “Whilst we welcome Newcastle Building Society’s willingness to co-operate with the Police to investigate wrongdoing, the irony of that statement is not lost on victims.
"NBS claims to have no responsibility for victims’ losses, however they were happy to introduce unregulated companies to their elderly and vulnerable members.
“As such, PTAG will press Newcastle Building Society and other building societies involved to offer more appropriate redress to victims who have suffered so greatly at their hands.”
The FCA has previously declined to investigate building societies over the issue. It said last year that building societies had not been conducting a regulated activity when it referred customers onto advisers but also stated “we can’t hold the building societies responsible for the actions of PTC”.