Icesave customers have received £250million of savings so far

19 November 2008 / by Rachael Stiles
Customers of Icesave have so far received at least £0.25billion of compensation from the Financial Services Compensation Scheme, which has been sending out emails containing instructions on how they can get their savings back.

As part of an accelerated compensation process, many customers have already received their money, which was previously frozen in the online savings account arm of Icelandic bank Landsbanki, just six weeks after it collapsed under the weight of the crumbling Icelandic banking system.

Although some emails were blocked from customers' accounts because they were incorrectly classed as spam, more and more customers are receiving them in stages as the FSCS implements the compensation process, with hopes to refund all of Icesave's 200,000 plus UK customers (which have about 300,000 accounts) this month.

After logging on to their online accounts and completing a short process, customers will receive their savings within five working days, plus any interest owed up until October 8 when Landsbanki was declared to be in default.

"Five weeks ago a lot of Icesave savers were worried that they were going to be left high and dry. Now they can be confident that the electronic process is underway and people are getting their money back." said FSCS chief executive Loretta Minghella.

After the Icelandic Government said it would not be able to honour its obligations to repay UK customers, the FSCS is compensating Icesave customers in full following the Treasury's announcement that it would top up any balances which exceeded the first £35,000 of each savers' money, offered by the FSCS, so that they didn't lose a penny.

But Iceland has now said that it will meet its legal obligations and refund the first £17,844 of each UK customer, under EU regulations, so that it can receive a much-needed $2billion injection of cash from the International Monetary Fund.

© Fair Investment Company Ltd