Philips Trust scandal: Two more firms handed £27m of building society customer savings collapse

The assets – including £44m worth of invested savings – ultimately ended up in the hands of a firm called Philips Trust Corporation, which itself collapsed into administration in 2022 following “co-mingling, pooling and mistreatment of client monies”.

Philips Trust had placed the savings with four “investment management” companies but administrator Kroll has been struggling to recover much of the cash owed.

It had left victims fearing they would never get their money back but last month Leeds, Nottingham and Newcastle announced they will voluntarily reimburse the full amounts customers had invested despite their organisations having no direct relationship with Philips Trust. A fourth mutual – Saffron Building Society – has now confirmed it will take the same step with other smaller societies currently making individual arrangements with affected customers.

Under the main agreement, the building societies involved will receive any recovered money that would have gone to affected customers at the end of the administration process in 2026.

Speaking to The Yorkshire Post when the refund announcement was made, Leeds Building Society chief executive Richard Fearon said it was unclear how much the mutual would get back but if was unlikely to be the full amount.

"There’s a lot of uncertainty about that. If I’m frank, I’m not sure there will be a great deal of recoveries coming back,” he said.

The prospects for recoveries has now been further affected by the collapses of CX Wealth and Float Capital, two connected companies which were handed more than £27m of the savings involved. They were both unregulated providers of business loans.

Entities connected to a third firm involved called Berkeley Rutherford had already separately gone into administration earlier this year with around £3m owed in that case. A court heard their money had been put into a series of ‘foolhardy’ high-risk loan s to small businesses which themselves have gone bust.

In a new update to affected victims, Kroll said of the £36.7m that had been due to be repaid by May 30 only £7.49m has been received along with around £875,000 in interest.

CX Wealth had been given £17.5m to invest and had been due to repay £12m by May 30. However, only £416,000 has been recovered from that firm, which entered administration on May 16.

Float Capital entered administration on the same day. It was initially given almost £10m and had been due to have repaid £8m by the end of last month. However, only £166,000 has been recovered.

The only organisation involved which has not gone into administration is litigation funder Woodville Consultants which has repaid £6.1m of the £12.9m against its name.

After talks between Woodville and Kroll it is to repay a total of £10m, including £1.5m in interest, by the end of October.

A further £3.8m figure – connected to money given to a now-dissolved company called Vobiss UK Limited – remains in dispute.