Philips Trust scandal: building societies right to pay back victims - now the police must act
The £138m family trusts scandal, which has affected the properties and life savings of more than 2,000 elderly victims, was becoming a stain on the otherwise noble reputation of several building societies across the country.
Unfortunately, customers at Leeds Building Society also fell victim after finding their savings mired in financial complications.
But just as the seasons are changing, today the clouds have begun to clear for the thousands of victims of this scandal, with Leeds, Newcastale and Nottingham building societies agreeing to cover 100 per cent of the investment each customer lost after their savings ended up in the hands of the Philips Trust Corporation (PTC).
It’s worth repeating that building societies didn’t have a direct relationship with PTC. And that technically there was no legal or regulatory requirement to offer financial help. However, morally it is the right thing to do.
Trust is the most important commodity for building societies. The question is why it has taken this long but the decision of these three building societies to pay tens of millions to affected customers should be welcomed.
There is still a need for the Financial Conduct Authority (FCA) to investigate the role of building societies in this scandal. If only so that they and the regulator can learn what went wrong and how to prevent similar situations developing in the future.
In fact the FCA’s role in this whole scandal deserves further scrutiny. Especially as it had been warned by a PTC whistleblower in 2020 that the firm was allegedly operating an effective ‘Ponzi scheme’ but only issued ‘guidance’ to the company as a result.
This newspaper’s attempts to get building societies to listen has only been possible as a result of the persistence of campaigners. However, this is not the end of the matter. The police must commit to a full investigation into PTC.