Victims of a £138m financial scheme they were told would protect their savings and homes if they went into care fear they’ll never see a penny of their hard-earned cash again after a company behind it went bust.

Furious and out of pocket, they have slammed building societies for claiming no responsibility over the scandal - despite them introducing them to the scheme initially - while some struggle to sleep or eat because of stress.

Many victims say they’d never have moved their assets into trusts if it hadn’t been for building societies including the Newcastle, Leeds and Nottingham.

All three had agreements with and earned commission for referring customers to third-party advisors who encouraged them to set up the trusts, saying it would protect their homes and investments for their children, or from being lost paying for social care in later life.

But that decision has instead had the complete opposite effect and they’ve been left fighting to keep their own homes and fear their life savings are lost forever after the company behind the trusts fell into administration amid alleged mismanagement.

Among more than 2,300 victims of the scandal are dozens in our region including Durham couple John and Carol Bell.

The Northern Echo: John Bell believes he will never see a penny of his life savings again.John Bell believes he will never see a penny of his life savings again. (Image: SARAH CALDECOTT)

They, along with a number of other customers of the Newcastle Building Society, have told The Northern Echo they feel they were misled into the scheme.

Between 2006 and 2017 customers like the Bells were advised to speak to third-party advisors about writing wills - which resulted in many setting up trusts - at Newcastle Building Society branches across the region.

Many of the customers were elderly or vulnerable.

The Tyneside-based building society had a relationship with the Will Writing Company (WWC) from 2006 and received a commission for referring customers to unregulated WWC advisors who often worked in branches and told elderly victims to set up trusts with sister firm the Family Trust Corporation (FTC), at a cost sometimes upwards of £3,000.

In 2018 the Will Writing Company went bust and many trust holders were advised to transfer management of their trusts to the Philips Trust Corporation (PTC). That too went under in April 2022, plunging more than 2,300 families into crisis, battling to keep homes and investments.

But Newcastle Building Society says it “never had a relationship with, nor at any point have we referred our customers to, Philips Trust Corporation”. A spokesperson said they were “very concerned by, and sympathetic to, the difficult situation faced by those affected”.

Meanwhile the Financial Conduct Authority, who desperate victims had lobbied to step in and hold building societies accountable said last month: “We can’t hold [them] responsible for the actions of PTC, which did not exist at the point the building societies referred customers to the EPG (Estate Planning Group - the parent company of WWC and FTC).”

John Bell, 77, and retired shop assistant wife Carol, 76, moved £120,000 of savings and their three-bed detached home in Brandon, Durham, then worth £170,000, into a trust at a cost of about £3,700 after a visit to their local branch in 2012.

The Northern Echo: John and Carol were referred to a WWC advisor at Newcastle Building Society's Durham branch in 2012.John and Carol were referred to a WWC advisor at Newcastle Building Society's Durham branch in 2012. (Image: SARAH CALDECOTT)

John, a former engineer told The Northern Echo: “If we put the house into this family trust, the WWC advisor said it would protect it if we had to go into care, and it would be better for us to put our investments into this trust too.

“We thought it was the right decision. We trusted the advisor and the people in the building society.

“We were lied to. Nobody told us these companies were unregulated. If we had known all of this, we would never have touched them. We’ve got an awful lot of regret.

“It makes me gutted thinking about it. We trusted everyone, they were supposed to be the experts. We never thought this could even happen – we thought it was all safeguarded. 

“It doesn’t look like we’ll get anything back from the £120,000 of investments we put in. I think it’d be worth about £150,000 now. The administrators get the first bite of the cherry.

“It was all our savings. Everything. It was there for us, our three children and four grandchildren.

The Northern Echo: John Bell.John Bell. (Image: SARAH CALDECOTT)

“We’re in the process of getting our house back in our names which will take a few more months but we’ve had to pay £4,000 to keep our own house.”

“We only found out they’d gone into administration when we noticed the £500 a month we’d been taking hadn’t gone into our bank. We’re both pensioners, it was a nice little top-up for us. It was panic stations, trying to work out where our money had gone.”

“Nobody has taken any responsibility.

“I would like to see the building society held accountable in some way because it’s through them that we were led into this situation.”

The Newcastle Building Society disputes not telling customers WWC was unregulated, saying literature at the time said the services were “not regulated by the FCA”.

Instead of making bespoke investments for individual trust holders, PTC piled a total £44m into four private companies - £15.7m of that was due to be received by administrators Kroll by February 23, but only £1.17m had been received.

The Northern Echo: Louise and Eric Cowan have also been victims of the scandal.Louise and Eric Cowan have also been victims of the scandal. (Image: DANIEL HORDON)

Kroll said because of “weak corporate governance and inadequate record keeping” by PTC it had no way of saying where money from each trust had been invested.

On top of whatever is recovered, Kroll will get to take money to cover its own costs before anything goes to victims. Those costs stood at £2.9m in January 2023 and have been rising since, leaving most fearing they’ll never see a penny, and further out of pocket after paying for deeds on their homes to be returned to them, plus legal fees.

Kroll managing director Geoff Bouchier told the Echo: “While due to the ongoing complexity of the case it is not possible to put an exact timeline on when it will conclude, we recognise the significant impact this situation has caused, and we sympathise with those affected.”

Trusts can be used to ringfence homes and savings from funding care costs or being swallowed up by inheritance tax, keeping as much as possible for families.

But a lawyer who has since helped tens of families plunged into what she calls a “massive mess” by the scandal says trusts aren’t appropriate for every client and said WWC had a “one size fits all” approach.

Claire Springle, of Springle & Co Solicitors in North Shields, has helped dozens of trust holders and questioned how the building societies can claim no responsibility.

The Northern Echo: Claire Springle.Claire Springle. (Image: SPRINGLE & CO SOLICITORS)

She said: “I have a lot of clients who are in a massive mess and the reason they are in this massive mess is because they set foot inside the building societies.

“If they had put their money with another high street bank, or wherever else, they wouldn’t be in the position they are in today.

“Surely the building societies must take some fraction of responsibility. They may be able to wriggle out on legal technicalities but from a moral point of view they must.

“These people aren’t stupid, they would never buy anything door to door. The only reason they thought it was a good idea was because it ultimately had the backing of the building society.

“All they (the victims) have done is go into the branch and they got collared. They went in just for normal day-to-day banking and came out in this mess.

“I have been in tears in the office after conversations I’ve had with clients. They can’t sleep. They can’t eat because they are so worried about what’s going to happen.

“It makes me feel ill - the thought that these people have done nothing wrong, and they (the building societies) have said ‘It’s nothing to do with us’. If it’s nothing to do with them, how come these people are in this situation?”

Another of Claire’s clients, retired couple Louise and Eric Cowan, 71 and 73, from Wideopen, Newcastle, put their house into trust after a meeting set up with a WWC advisor at the Gosforth branch of the Newcastle Building Society in 2016.

The Northern Echo: Louise and Eric Cowan outside the home they put into a trust and feared losing.Louise and Eric Cowan outside the home they put into a trust and feared losing. (Image: DANIEL HORDON)

The pair say they paid £4,000 to set up the trust, believing they and their daughter living in Spain would be the trustees - only to later discover their names had been taken off the deeds of their home altogether.

Louise feared they’d lose their three-bed detached of 40 years as it could have been sold beneath their feet without their consent.

The former support worker said: “They had removed our names in 2016 so they had complete control of our house.

“It’s been an expensive process. The lawyer did the legal work to get our names registered back on the deeds – that cost about £1,500. Then we had to pay the administrators about £2,500.

“We’re nearly £10,000 out of pocket just to keep our own house.

“I thought we were going to lose the house - I didn’t sleep for weeks.

“We aren’t wealthy at all, we worked hard to buy our house.

“We trusted Newcastle Building Society. We thought if they were sending this person out we could trust them. In hindsight what started as a conversation about wills turned to him selling us a trust in about two minutes, he made us believe it was the best thing for us.

The Northern Echo: Louise and Eric visited the Newcastle Building Society branch on Gosforth High Street.Louise and Eric visited the Newcastle Building Society branch on Gosforth High Street. (Image: PA BUSINESS WIRE)

“Most of the victims are over 60. I think we were targeted – they hooked people in by mentioning wills and the building society made money out of us.

A Newcastle Building Society spokesperson said they may consider providing support to victims down the line, adding: “We are currently engaging with the administrators, Kroll, to better understand the impact on those affected and their next steps. 

"Once this information is available, we will be in a position to consider if we may be able to provide some support to affected customers on a voluntary basis. Given the complexity of the situation and early stage of proceedings we are unable to pass further comment at this stage.”

Labour MP for Durham Mary Kelly Foy described the scandal as ‘wholly unjust’ as she called for more support for victims.

She said: “It is wholly unjust that what appeared to be advice coming from a trusted financial source has left John - along with thousands of innocent people across the country - in this position.

The Northern Echo: Durham Labour MP Mary Kelly Foy.Durham Labour MP Mary Kelly Foy.

“We need to see more support for those who have suffered huge financial losses as well as emotional distress due to the collapse of the Philips Trust Corporation.

“It is clear Britain’s regulatory framework has utterly failed; the government must investigate how this was allowed to happen. They must also take action to ensure this does not happen again.”

Last March SNP MP Peter Grant raised the scandal in the House of Commons. Leader of the House Penny Mordaunt said she would refer it to the Chancellor and Business Secretary.

An FCA spokesperson said: “We know the collapse of Philips Trust Corporation has led to significant distress for those who lost money, and have considered this issue carefully.


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"While the building societies are regulated by us, these introductions were not for activities we regulate. We do not decide what activities fall within our remit.

"Legislation expressly excludes this type of estate planning trust services.

“Some of the building societies involved have told us that they are engaged with the administrators, to explore some possible support to affected customers on a voluntary basis.”