Failed trust fund families to get full payments

Kathleen Birtley put about £105,000 into a PTC trust

Building society customers who lost their life savings when a trust fund firm went bust have been told they will get all their money back.

Philips Trust Corporation (PTC) went into administration in 2022 leaving more than 2,000 people out of pocket.

Some of those people have argued Newcastle, Leeds and Nottingham building societies bore some responsibility for their money eventually ending up with PTC.

Gordon Crosthwaite, whose mother in law had lost thousands of pounds, said the financial offer was "better than expected".

The three building societies have now pledged to re-establish “100% of each customer’s PTC investment balance”.

In a joint statement, they said: “Each society is using their strong financial foundations to voluntarily offer support to their respective customers.

“There is no legal or regulatory requirement to offer financial help.”

Disabled son's care

Mr Crosthwaite said his mother-in-law Kathleen Birtley, from Northumberland, put about £105,000 into a PTC trust after initially being referred to the Will Writing Company by NBS.

She hoped the money would be used to take care of her disabled son when she died, he said.

Mr Crosthwaite said the family had been dealing with Newcastle Building Society (NBS) back and forth for two years trying to get the money back, and his mother-in-law was pleased with the building societies' pledge.

NBS chief executive Andrew Haigh said: “Our members understand our commitment to purpose and our support for the communities we serve, which makes it even more important that we go ahead with this voluntary support for members at this time of great difficulty.”

For customers who put their properties into a PTC trust, the building societies will also provide up to £2,400 towards the cost of changing trustees.

Affected customers have been told they will be contacted by PTC’s administrators, Kroll, by the end of May.

Chain of events

The Will Writing Company, whose services had originally been referred to customers by NBS, went into administration in 2018.

An entity connected with PTC took over its assets, the BBC understands.

NBS said it wrote to customers to make clear it had no relationship with parties connected to PTC.

Some customers said they had not received the first letter and argued they received a second letter too late to act on it.

Newcastle solicitor Claire Springle previously told the BBC she believed some of her clients only ended up with PTC because they had accounts with NBS.

She said the building society referred some customers to the Will Writing Company to help them write wills and plan their estates, and the company then recommended some of those to its sister firm, Family Trust Corporation (FTC), to help them put their homes and savings into trusts.

Many of her clients, most of whom were older, did this because they thought they could avoid future care costs, she said.

When PTC took over parts of the Will Writing Company in 2018, several FTC customers switched the ownership of their trusts to PTC, according to the Financial Conduct Authority (FCA).

After PTC went bust in 2022, it emerged it had moved its customers’ money to higher risk investments, the FCA said.

NBS maintains PTC independently contacted customers, inviting them to transfer to itself some less risky regulated trusts that had been set up by FTC.