Comments | mas90: Icesave and the FSCS

mas90

Icesave and the FSCS

Oct 29, 2008 04:04

Unless you've been living in a cave lately you'll probably have noticed that Icesave ran out of money, as did the Icelandic government; hence Icesave customers get the unique privilege of being part of the first major test of the Financial Services Compensation Scheme (FSCS), the "UK's compensation fund of last resort for customers of financial ( Read more... )

Comments 11

Icesave and the FSCS anonymous October 29 2008, 08:12:03 UTC

Icesave already used the Newcastle BS computer system prior to their crash and therefore are not implementing 'a new online banking system'. Without knowing the full details I would assume that customers of Icesave will be able to logon to their Icesave account using their secure data and password (as before) and withdraw their money into their linked bank account. Note that Icesave customers had to have a linked account as a condition of opening an Icesave account. Misinformed comment by Malc does not help the situation.

Re: Icesave and the FSCS king_of_wrong October 29 2008, 11:46:02 UTC

Misinformed comment by Malc does not help the situation.

Do you normally post on Robert Peston's BBC blog? The situation is - as always - completely unaffected by the blogosphere.

Yes, if they're using an existing system - and one might expect that such systems would have been put out to tender shortly after the FSCS' creation - then the risk is mitigated. On the other paw, if they're proposing a greenfield development in ten days, it's time for a Henny Penny moment...

Re: Icesave and the FSCS mas90 October 29 2008, 16:42:04 UTC

Icesave already used the Newcastle BS computer system prior to their crash
Yes, I'm well aware of this; it's not yet clear how much of the compensation system will be based on their current system, but the FSCS's article seems to imply that it will not be accessed in the way that Icesave customers currently use. However in any case I would generally expect any change to an online banking system to have a development cycle of more than 10 days to allow for sufficient planning and testing.

gerald_duck October 29 2008, 16:57:23 UTC

They might have started development before the announcement.

On the other hand, the data-protection implications if Icesave has handed its database to the FSCD are also considerable and scary.

crowsty October 29 2008, 08:15:51 UTC

There have been murmurings of using an online payout system from not long since icesave collapsed, so they have had more than ten days to implement it ( ... )

ISAs djs203 October 29 2008, 13:38:17 UTC

"if they'll only be moving to already-confirmed linked accounts, this shouldn't be a problem."

But to cope with those of us who had ISAs with Icesave, the system needs to be a little bit more complicated than that. My linked account is a current account -- if I transfer my Icesave ISA money to that then I lose its tax exempt status, and the FSCS statement says "people will not lose their tax status for their ISAs"

The FSCS website says that they normally aim to process all claims within six months [1] -- imagine how much longer that would be if they had 200,000 paper forms to process. The website is a necessary evil for people to get their money back quickly. Let's hope they do it right.

1. http://www.fscs.org.uk/consumer/FAQs/Deposit_claims_FAQs/

Re: ISAs crowsty October 29 2008, 19:08:46 UTC

Not necessarily. They could permit moving to your current account, and send a 'certificate', to confirm how much you had in the ISA, and bend the rules to allow you to put the money in a new ISA by presenting the certificate to your new ISA provider and a standard cheque. Nice simple system. Yes, it isn't perfect but it should work. This wouldn't be the first time that money has been allowed to regain its tax-free status either - Northern Rock customers who panic withdrew were allowed to put the money back into the ISAs.

Much more interesting is the situation with fixed rate accounts, for which the FSCS have stated people would be allowed to keep for the full term ( and presumably receive the promised interest, but they haven't really given the details). If this happens, then they will need to keep an 'Icesave compensations' system in operation for 3 years!

(I'm in both the having an ISA and having a Fixed Rate camps btw)

Re: ISAs emotional_porn October 29 2008, 23:15:30 UTC

Ditto.

Quite keen to ditch the fixed rate if they allow you to do so, though.

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