Newcastle Building Society latest to commit to 'meaningful' payments to customers caught in £138m scandal

It follows similar announcements by Leeds and Nottingham Building Societies last week.

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.

Several building societies – the largest of which were Leeds, Nottingham and Newcastle – introduced hundreds of customers to unregulated advisers who sold them family trusts linked to properties and investment schemes for their savings which have since become mired in financial complications.

The assets – including £44m worth of invested savings – ultimately ended up in the hands of Philips Trust.

PTC did not have a direct relationship with any of the mutuals involved but all of its customers were former clients of the Family Trust Corporation who had been introduced to that firm by their building societies.

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. The situation has left affected victims fearing they will not get any of their life savings back.

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

But Newcastle Building Society has now confirmed it will provide support to affected customers on a voluntary basis.

Details of how any scheme could work are yet to be confirmed.

CEO Andrew Haigh told this week’s AGM: “I can confirm today that, it is our intent, on a voluntary basis, to provide meaningful support for affected customers.

“It will take a little while longer to work through the detail of precisely where this support will apply and how it will be delivered and we’ll share further information in the coming weeks.”

A Newcastle Building Society spokesperson has also confirmed the mutual has offered support “to any ongoing or future police investigations” relating to Philips Trust.

Leeds Building Society has previously called for a police investigation into the matter to be reopened.

Greater Manchester Police said last year it was pausing its investigation as the administration process for PTC continues.

The force has subsequently said it would only consider reopening an investigation if administrator Kroll provided the force with potential evidence of criminality.

The Financial Conduct Authority has recently announced it will not be investigating the role of building societies in regard to Philips Trust.

It said 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”.