Articles | Icesave customers left in the cold

Icesave customers left in the cold

Published: Tuesday, 7 October 2008, 3:07PM

Customers of Icelandic web bank Icesave may have to claim their money back through compensation schemes after its parent company went bust.

Icesave is owned by Landsbanki, Iceland's second-largest bank by value which has gone into receivership, forcing the country's government to part-nationalise it.

The Icelandic Financial Supervisory Authority has already led to the part-nationalisation of the country's number-three bank Glitnir amid new legislation to give the government sweeping powers over the banking sector.

A notice on the Icesave website said: "We are not currently processing any deposits or any withdrawal requests through our Icesave internet accounts.

"We apologise for any inconvenience this may cause our customers. We hope to provide you with more information shortly."

Meanwhile, angry consumers have accused Icesave of using high interest rates to tempt people to hand over their money to shore up the troubled group.

A forum on the issue on MoneySavingExpert.com has received more than 1,500 posts.

Justin Smith, an IT consultant from West London, said: "I feel confused and badly informed by Icesave - there has been no direct communication from the firm and now I am unable to withdraw my life savings, with no idea on what happens from here.

"I only recently transferred all my ISA savings to the bank, attracted by high interest rates and guarantees and now I am facing the prospect of having to go through the painful process of claiming back from two governments and the possibility of losing my ISA tax wrapper on nearly ten years' of savings."