Sunderland victim of Philips Trust scandal 'loses £100k'

Eighty-five-year-old Dorothy Hitcham is the latest victim of the Philips Trust scandal to tell The Northern Echo of her pain after the £138m financial scheme collapsed.

She was referred by the Newcastle Building Society in 2012 to unregulated third-party advisors who told her and husband Eric to set up a family trust.

The building society took a commission for referring customers like Dorothy to the Will Writing Company (WWC), whose advisor told Mr and Mrs Hitcham putting their home and savings in a family trust would protect them if they went into care.

But when the company behind the scheme, the Philips Trust Corporation (PTC) went bust in April 2022 Dorothy, who lost Eric aged 75 to motor neurone disease in 2014 and more than 2,300 victims fear their savings have been lost forever.

File photo: Newcastle Building Society branch. (Image: SARAH CALDECOTT)

The Hitchams put their £280,000 bungalow in Seaburn, Sunderland, and investments believed to be worth £97,000 into a trust at an initial cost of £3,200.

Dorothy, a retired radiographer, feels she and Eric were targeted because of their age and has slammed the Newcastle Building Society for taking no responsibility.

She told The Northern Echo: “It makes me extremely angry.

“I feel angry. I feel depressed. I feel miserable. I feel cheated.

“The building society completely let us down. We trusted them, we put our money into the trust because they told us to speak to the WWC, we would never have done it otherwise.

“I know they’re not responsible for what followed, but if it hadn’t been for them we wouldn’t have done it.

Dorothy Hitcham, 85, from Sunderland. (Image: SARAH CALDECOTT)

“Everything seemed to be going well until 2018 when I received a letter saying WWC was going into administration. Things went from bad to worse when the Philips Trust went the same way.

“I just sat and cried – I haven’t got anybody to talk to about it. My children live abroad, they do what they can, but they can’t be here.”

Dorothy initially paid £3,200 to set up the trust after a meeting at the Sunderland branch of the Newcastle Building Society, and says she was told: “It would cost us no more money ever.”

But since the Philips Trust collapsed into administration Dorothy had to pay £2,500 to get her home back in her own name and prevent it being sold beneath her feet, and fears her savings are gone forever.

She said: “I have no hope of getting the savings back.

“We had worked hard all our lives and saved up this money for our retirement.

“We saved all our lives and if we didn’t spend it, it was to go to my son and daughter, and my four grandchildren.

Dorothy Hitcham. (Image: SARAH CALDECOTT)

The Newcastle Building Society had an agreement with WWC where they earned a commission for referring customers to their advisors to write wills. Those advisors often encouraged people to set up trusts with sister firm the Family Trust Corporation.

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”. They also claim they made it clear WWC advisors were unregulated, but some victims dispute this.

The Financial Conduct Authority last month said it “can’t hold building societies responsible for the actions of PTC, which did not exist at the point [they] referred customers to the EPG (Estate Planning Group - the parent company of WWC and FTC)”.

Administrators Kroll is trying to salvage £44m PTC invested in 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. Kroll will pay its own costs from whatever is recovered, a bill which stood at £2.9m in January 2023 and increasing since, leaving victims believing they’ll never see a penny of their savings.

Dorothy is among dozens of victims of the scandal in the North East.

On Monday the Echo told how Durham couple John and Carol Bell fear their hard-earned savings worth about £150,000 are gone forever and how a Newcastle couple are out of pocket after discovering their names had been completely removed from the deeds of their home.

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Claire Springle. (Image: SPRINGLE & CO SOLICITORS)

Lawyer Claire Springle who has helped dozens of victims said: “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.

“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.”