Guernsey customers angry over Icesave compensation

Customers from the UK who had money in Guernsey branches of the Icelandic bank, Landsbanki, have expressed outrage, stating that their money is going towards compensating others whilst they will receive back very little of the money that they had placed into the bank.

Many Icesave customers from the UK had money in these high interest accounts, but those with accounts in the UK have been told that they will receive back their money in full due to a guarantee from the UK government after the Icelandic authorities failed to honour obligations relating to compensation.

However, the guarantee does not apply to those with savings in Guernsey, as these are classed as off-shore accounts. However, many are angry because they are normal hardworking consumers who had no other choice but to open a Guernsey account because of their location. Around two thousand consumers with accounts in Guernsey are likely to lose all of their money apart from around 30% according to recent reports.

The Landsbanki Guernsey website stated: ‘Deposits made with LG are not covered by the Financial Services Compensation Scheme established under the UK Financial Services and Markets Act 2000. Landsbanki has given an undertaking to discharge those liabilities of LG which LG is unable to discharge from its own assets, whilst it remains a Landsbanki subsidiary.’

A Treasury official from the UK said: ‘Investors with accounts outside of the UK’s jurisdiction and the regulation of the FSA should talk to the relevant authorities where their money is invested. Following discussions with the Isle of Man, the UK Government has agreed to represent the Island in high level discussions with the Icelandic authorities. The UK Government would also be willing to represent Jersey and Guernsey should it be asked to do so.’

Tags: subsidiary, Guernsey, guernsey icesave accounts, scheme, Business Finance, Island, icesave, off-shore accounts