Building society to help failed trust fund families

A building society has said it will offer “voluntary” financial support to some of its customers who lost their savings when a trust fund firm went bust.

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

Some of those have argued Newcastle Building Society (NBS) bears some responsibility for them eventually ending up at PTC.

However, at NBS’s annual general meeting this week, its head said it was not responsible for PTC’s actions but would offer “meaningful” support to some customers.

Chief executive Andrew Haigh said the firm could not share details about payments as it was working out "where exactly this financial support will apply".

In the meeting, he said the building society considered the actions of PTC “worthy of consideration by the police”.

NBS said it had been in touch with the police and stressed it never had a relationship with PTC and did not refer customers.

Gordon 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.

But Mr Crosthwaite said he feared she would not get the money back.

It was unclear what Mr Haigh meant by "meaningful" support and who would actually receive any money, he added.

"We'll wait and see," he said.

The BBC understands an entity connected with PTC took over the assets of the Will Writing Company, which went into administration in 2018 and whose services had originally been referred to customers by NBS.

NBS maintains it wrote to customers to make clear it had no relationship to parties connected to PTC, after PTC acquired the assets of the Will Writing Company.

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 said she believed some of her clients only ended up with PTC because they had accounts with the building society.

NBS referred some customers the Will Writing Company to help them write wills and plan their estates, said Mr Springle.

This firm then recommended some to its sister company, Family Trust Corporation (FTC), to help them put their homes and savings into trusts.

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

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.

“This meant that, unfortunately, a lot of its customers face potential investment losses,” the regulatory body said.

PTC's administrators, Kroll, said it held approximately 2,345 trusts.

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