ICE SAVE has gone bust

[eastlondonseagull]

...apparently. Anyone (like me ) trying to get money out of their Ice Save account is being greeted with the following message:

We are not currently processing any deposits or any withdrawal requests through our Icesave internet accounts. We apologise for any inconvenience this may cause our customers. We hope to provide you with more information shortly.

BBC news just now said that the bank's been declared insolvent and that customers will have to get money back via the financial compensation scheme.

I had £3500 in there, ready to pay my solicitors / estate agents for house move. Can't f***ing believe it! How long's it gonna take to get the money back?!!



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[beorhthelm]

thats a bugger. though i wonder why people put money in foreign banks in the first place. at least the compensation would have been quicker. i think you'll still be good, upto 15k is coverd they said last night.

 

[Tricky Dicky]

Don't think it's gone bust exactly. Obviously a bit poorly though.

 

[Storer68]

Seems to have been bailed out by the Russiians

Fromn the BBC

Icesave savers warned on accounts
Customers of the Icesave internet bank have been warned they will probably have to claim compensation for money held in their savings accounts.

The authorities in the UK are preparing for the bank's parent in Iceland, Landsbanki, to be declared insolvent.

The Icelandic government took control of the country's second biggest bank on Tuesday to stop it collapsing.

Claims from Icesave's UK customers will be handled by the Financial Services Compensation Scheme (FSCS).

Under the depositor protection arrangements in Iceland and the UK, the Icelandic authorities will be liable for the first 20,887 euros (£16,300) of compensation.

The UK's FCSC will pay out the rest of the claims, up to the newly introduced ceiling of £50,000 per person.

"If, as expected, the Icelandic authorities put the firm into insolvency proceedings this would trigger a default under the FSCS," said the Financial Services Authority.

"In this case, savers with Icesave could make a claim to get their money back," it said.

Landsbanki later issued a statement saying it had gone into receivership, not liquidation, and that the Icelandic Financial Services Authority had appointed a receivership committee.

"Work has already begun on the restructuring of the operations of Landsbanki," it said.


We are gearing up to be ready to do whatever we can in order to get compensation back to UK savers as quickly as possible
FSCS spokesman

A spokesman for the FSCS said that if Icesave were declared insolvent, UK customers would not have to make two separate claims and that it would probably handle all UK claims on one form.

"We are working with the Icelandic authorities to confirm the procedure," a spokesman said.

"We are gearing up to be ready to do whatever we can in order to get compensation back to UK savers as quickly as possible," he added.

Insolvent

The Financial Services Authority (FSA) said it was expecting Icesave's parent bank to be declared insolvent soon, following its takeover by the Icelandic Financial Supervisory Authority (IFSA).


I haven't slept for a couple of days. This was money put away for retirement
Icesave customer Mike Davis


Icesave says that it is not currently allowing customers to take money out of their accounts or to put in deposits.

This dismayed customer Mike Davis, 62, who has £75,000 in retirement savings locked up in an Icesave account until 25 October.

His daughter also has savings there and his partner, Pam Henson, 67, has £23,000 with the same bank.

The couple are getting married on 1 November, and Mr Davis, who lives in Gloucestershire, said he was "shaking with worry" when he heard about problems with Icesave.

"This cannot have come at a worse time. It is a pretty devastating blow," said Mr Davis, a landscape architect.

"I haven't slept for a couple of days. This was money put away for retirement."

He was expecting a long process of trying to recover savings and called for governments to guarantee 100% of savings.

Emergency

Landsbanki is the second Icelandic bank to be taken over to prevent a collapse of the country's banking system.

In an announcement on state radio, the commerce and banking minister Bjorgvin Sigurdsson said the board of directors of Landsbanki had been dismissed and the bank put into receivership.

He said the state takeover was made "in co-operation" with Landsbanki and the bank would stay open and operate as normal.

Glitnir, the country's third-largest bank, was nationalised last week to stop it being driven into bankruptcy by the international financial crisis.

In a parallel move, Iceland's largest bank Kaupthing has been given a loan of 500m euros from the country's central bank.

"The central bank of Iceland has provided Kaupthing with a 500m euro loan to facilitate operations, and Kaupthing is committed to working with the government to ensure regular workings of the Icelandic financial system," the bank said in a statement.

Meanwhile there is confusion about whether or not Russia has agreed to help the Iceland central bank itself.

The bank said Russia would give it a loan of 4bn euros lasting for three to four years, to strengthen its foreign exchange reserves.

"The Russian Ambassador to Iceland, Victor I Tatarintsev, informed the chairman of the board of governors of the central bank of Iceland this morning that Russia would grant the central bank a loan in the amount of 4bn euros," said the bank in a statement.

"Prime Minister Putin has confirmed this decision," it added.

However the Russian ministry of finance denied explicitly that any decision on giving a loan to Iceland had been made.

Continued operations

On Monday the Icelandic government passed emergency legislation to try to rescue the country's banking system.

Prime Minister Geir Haarde said the new laws would help the island avoid "national bankruptcy".

Iceland also decided to offer an unlimited guarantee for all bank customers' savings accounts.

The website of Icesave tells customers that: "We are not currently processing any deposits or any withdrawal requests through our Icesave internet accounts.

"We apologise for any inconvenience this may cause our customers. We hope to provide you with more information shortly," it adds.

A spokeswoman for the bank said the website was not operating "due to technical difficulties", but did not offer any further reason for it being down.

Explaining its action in taking over Landsbanki, the IFSA said: "Based on new legislation, the Icelandic Financial Supervisory Authority (IFSA) proceeds to take control of Landsbanki to ensure continued commercial bank operations in Iceland.

"Domestic deposits are fully guaranteed, as declared by the government.

"Landsbanki's domestic branches, call centres, cash machines and internet operations will be open for business as usual," it added.

 

[eastlondonseagull]

thats a bugger. though i wonder why people put money in foreign banks in the first place. at least the compensation would have been quicker. i think you'll still be good, upto 15k is coverd they said last night.

I chose them simply because the interest rate was so good - 6.5% was the best Cash ISA around at the time.

 

[Exmouth Seagull]

From the BBC News website;

Under the depositor protection arrangements in Iceland and the UK, the Icelandic authorities will be liable for the first 20,887 euros (£16,300) of compensation.

The UK's FCSC will pay out the rest of the claims, up to the newly introduced ceiling of £50,000 per person.

Its gonna be a pain in the arse, but if your deposit is under £50K your cash should be safe

 

[DIFFBROOK]

Sorry to hear that Eastlondonseagull. Hope you get your money back fairly sharpish. Do you know if its a straightforward £3500 or will they honour the interest as well?

Seems like a number of people will be in the same boat. It wasn't long ago, just a few months, that so called money experts were telling us to put money into banks such as icesave becuase of the rate they paid.

Just wonder where this is going to end. Certainly the days of easy credit are over!

 

[Tricky Dicky]

I chose them simply because the interest rate was so good - 6.5% was the best Cash ISA around at the time.

I think that would be the only reason for choosing them. I know my parents went there becuase of that, not sure how much they have there though, but it does sound like it should be covered.

 

[Chicken Runner61]

It could take up to about 6 months to get your/our money back.

I am geting quite concerned now as I suspect that most European banks are quite suspect.

You can't trust what they are saying and as someone said on another thread the bailouts are only about 4% of the total toxic spread.

I doubt very much if any country could payout everyone if every bank needed assistance.

 

[eastlondonseagull]

There's a huge debate going on the Money Saving Expert forum, but this comment caught my eye...

Let's look at the facts as, understandably, there is an awful lot of speculation, gossip, and waffle.

1. There is no need to consider a claim for compensation yet as Landsbanki has not gone bust.

2. The government has taken control over the bank so it can get a grip and sort it out.

3. The bank has been put it into receivership. This is NOT the same as liquidation. If it was liquidated, it would have to pay out to all creditors. Receivership gives it short-term protection against anyone laying a claim on them.

3. The PM has stated that it has already begun restructuring the bank. Now, this could involve the selling off of its overseas assets and repatriating the money back to Iceland (as widely documented) and could also include (and I am guessing here), the sell-off of Icesave to another bank (a bit like what GB did with the sale of the Bradford & Bingley accounts to Santander).

4. As a result, and to fully evaluate what Icesave is worth, no transactions are allowed to take place. This is understandable. Don't forget, they are not even allowing you to put money IN.

5. Icesave have to sit tight and await instructions from the PM (and so do we for that matter).

Freezing the bank accounts is the only option (mine being one of them). If not, people would take all their money out - I would be tempted. However, if later on today, the PM announces that Icesave is being sold off to another big, strong, stable bank, say HSBC or Santander for example, no-one would worry and they wouldnt have lost a penny.

It's annoying having to wait, but all the time the Icelandic government is doing something, there is hope all will be OK.

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[Tricky Dicky]

It could take up to about 6 months to get your/our money back.

I am geting quite concerned now as I suspect that most European banks are quite suspect.

You can't trust what they are saying and as someone said on another thread the bailouts are only about 4% of the total toxic spread.

I doubt very much if any country could payout everyone if every bank needed assistance.

Trouble is, there are no clear financial borders any more, so potentially nothing is safe. My parents recently sent a letter to Ice Save notifying them of a change of address and got a letter of acknowlegdement back from Bradford & Bingley - you just don't know who owns what these days. We saw that yesterday with all the Iceland news and a load of our high-stret stores that they own or part-own.

 

[eastlondonseagull]

Interesting info from Which? here...

ICESAVE - latest news for Which? savers

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[eastlondonseagull]

Trouble is, there are no clear financial borders any more, so potentially nothing is safe. My parents recently sent a letter to Ice Save notifying them of a change of address and got a letter of acknowlegdement back from Bradford & Bingley - you just don't know who owns what these days. We saw that yesterday with all the Iceland news and a load of our high-stret stores that they own or part-own.

Regarding who owns what, here's a long list on the Times' website...

Money Central - Times Online - WBLG: Which banks own which brands - the list in full

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[Tricky Dicky]

Regarding who owns what, here's a long list on the Times' website...

Money Central - Times Online - WBLG: Which banks own which brands - the list in full

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Thanks ELS, that is actually quite interesting, but before all these troubles, would you have gone to the effort of finding out where your money really was, if you invested in one of these accounts ? I know I wouldn't have.

 

[eastlondonseagull]

Thanks ELS, that is actually quite interesting, but before all these troubles, would you have gone to the effort of finding out where your money really was, if you invested in one of these accounts ? I know I wouldn't have.

Nope, not at all. I simply looked at interest rates, and as I was only 'saving' and not 'investing', I never really worried about any of this business. What a nightmare. Looks like I may have to use the small proceeds from the sale of my house to pay solicitors and estate agent's fees, now, further diminishing the deposit for next place. Buggery.

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[Chicken Runner61]

Thats interesting/worrying.........

Derbyshire BS was/is owned by Co-operative Bank.


Didn't it get taken over by Nationwide - Does that mean Co-op Bank lost money because I never heard their name mentioned .......

Hang on --------- No its ok its the loan bit that was owned by the Co-op - still what happened to that then?

 

[beorhthelm]

I am geting quite concerned now as I suspect that most European banks are quite suspect.

You can't trust what they are saying and as someone said on another thread the bailouts are only about 4% of the total toxic spread.

most of the "toxic debt" was in Lehmans and AIG. ones dead (therfore so is the bad debt) and the other limps on with govenment backing. most banks do know now how much exposure they have, for instance HBOS was reported to have about £2.5billion which potentially will have to get written off, or about half its previous years profits... quite managable really. its just panic and fear that causing this now, along with technical factors that mean investment institutions are obliged to sell off some shares.

 

[Chicken Runner61]

most of the "toxic debt" was in Lehmans and AIG. ones dead (therfore so is the bad debt) and the other limps on with govenment backing. most banks do know now how much exposure they have, for instance HBOS was reported to have about £2.5billion which potentially will have to get written off, or about half its previous years profits... quite managable really. its just panic and fear that causing this now, along with technical factors that mean investment institutions are obliged to sell off some shares.

Its not that simple, the debts the banks have are much potentially much higher, so potentially high that every bank is either too scared to lend what they have out to other banks or is trying to hang on to it to help it cope with the losses. It might be fear and panic but its real fear and real panic. They don't actually know how to deal with it because they have never been in the situation of needing money to get over a shortfall even for a small while.

Many normal businesses go through this all the time and then get a loan to tie them over or in really bad cases go for the loan and go bust when they can't borrow it. Unless banks do a Leeson and have to declare high losses they normally can easily borrow their way out of it without anyone knowing but this is much, much more and they can't cope and have to get help from the governments.

The share prices fall because technically they are insolvent. If you saw the guy from leamans get grilled yesterday you would see how much they can normally snort from the trough (he had £2.5B in 6 years) without anyone knowing. Not so easy now when you can't get Joe Public to pay for it though

 

[bardo]

One other question to be asked is that as, like ELS, my wife and I both have Icesave Cash ISA's as it has been a Best Buy for some time. So if we have to claim compensation will the ISA still be transferrable, i.e will we still get our tax-free interest or will it be lost as happens if you withdraw your cash from an ISA?

 

[eastlondonseagull]

One other question to be asked is that as, like ELS, my wife and I both have Icesave Cash ISA's as it has been a Best Buy for some time. So if we have to claim compensation will the ISA still be transferrable, i.e will we still get our tax-free interest or will it be lost as happens if you withdraw your cash from an ISA?

You got me there, Bardo. What do you mean by...

..will we still get our tax-free interest or will it be lost as happens if you withdraw your cash from an ISA?

I was planning to take my cash out over the next few weeks, leaving a few quid in to make it tick over. Presumeably, if Iceland hadn't sunk this would still be tax free?!

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