8th October 2013
The Financial Services Compensation Scheme (FSCS) has revealed it paid out just over £4.5bn in compensation to 228,516 customers due to the collapse of the Icesave account run by Icelandic bank Landsbanki. The average pay-out was £15,215.53 five years to the day the scheme collapsed.
In a release about the issue, the FSCS gives the following financial details.
The FSCS says that it used an innovative online payment process to compensate the overwhelming majority of Icesave customers by early December 2008. The relatively small number of people that did not complete the process by the 30 December 2008 deadline were sent paper application forms.
Mark Neale, chief executive of FSCS, said: “For many people, the collapse of Icesave was the moment at which the credit crunch became very real. The experience of Icesave customers proves that when people needed help, FSCS was there.
“However our research continues to show a lack of understanding and knowledge about the protection we provide. We want to reassure the vast majority of people that their money and savings are safe, and warn those who unwittingly put their money at risk.”
Since Icesave’s failure the protection rules for UK authorised banks, building societies and credit unions have been improved and simplified to benefit consumers.