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A retired couple feared they would lose their home and £120,000 in life savings after falling victim to an investment scandal have said they were lied to and are demanding answers.
Pensioners John and Carol Bell invested £120k of their own cash and their detached home into a family trust after a meeting with a Newcastle Building Society branch in 2012.
The grandparents paid £3,700 for the account but lost everything when the Philips Trust Corporation (PTC) took over the trusts and went into administration in 2022.
Between 2011 and 2017, the Building Society had a referral agreement with the Will Writing Company (WWC) which received commission for sending customers to them.
But the will company went bust in 2018 and their assets and database were acquired by the Philips Trust Corporation, who then went into administration themselves four years later.
Mr Bell 77, and retired shop assistant wife Mrs Bell, 76, moved £120,000 of their savings and their three-bed detached home in Brandon, Durham, then worth £170,000, into the trust at a cost of about £3,700 before the turmoil.
Mr Bell a former engineer said: ‘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.
‘It was all our savings. Everything. It was there for us, our three children and four grandchildren.
‘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.
‘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.’
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.
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.
Retired couple Louise and Eric Cowan, 71 and 73, from Newcastle, put their house into trust after a meeting set up with a WWC advisor at the Gosforth branch of the Building Society in 2016.
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 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.’
Newcastle Building Society claims 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.’
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.’
Claire Springle, of Springle & Co Solicitors in North Tyneside, has helped dozens of trust holders and questioned how the building society can claim no responsibility.
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 society.
‘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 society 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 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.’
A Newcastle Building Society spokesperson added: ‘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.’
Kroll managing director Geoff Bouchier said: ‘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.’
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
