the richest man in atherstone

Today I received an email from the FSCS detailing the compensation procedure. I've reproduced it below for IceSave depositors that haven't got it yet (and for those that are just interested).

Dear Icesave account holder

Icesave accounts with the London branch of Landsbanki Islands hf

This email has been sent to you because records available to us indicate that you hold an account with Icesave. If you do not hold such an account, please contact us by email at enquiries@fscs.org.uk

The Financial Services Compensation Scheme (FSCS) is pleased to confirm the arrangements by which account holders with Icesave will be paid compensation. This will be done through a streamlined electronic process using the bank account that was nominated by you for the purpose of receiving funds from your Icesave account.

Icesave was operated by the UK branch of Landsbanki Islands hf, an Icelandic bank, which stopped doing business on 7 October 2008 and, for the purpose of claims to the FSCS, was declared to be in default on 8 October 2008. Depositors with Icesave are protected for the first part of their loss by the Icelandic Depositors’ and Investors’ Guarantee Fund (DIGF) and for the next part of their loss (up to £50,000) by the FSCS. On 8 October 2008, the Chancellor of the Exchequer confirmed that all depositors with Icesave would be paid their deposits in full, including what they are entitled to from the DIGF and the FSCS and any amounts above the maximum compensation payable by the FSCS.

This communication sets out the basis on which compensation will be paid to you. The full payment will be arranged by the FSCS, although HM Treasury (HMT) will in the first instance fund amounts to which depositors are entitled from the DIGF and, if applicable, amounts above the current FSCS limit of £50,000. Depositors will be paid without needing to submit a separate application either to HMT or the DIGF.

We will be using the existing Icesave website to pay compensation. You may notice that the website looks a bit different. This is because we have removed some of the images on the website to improve its performance during the electronic payment process. The website will be unavailable this week whilst we develop it to pay compensation. Please also be aware that the log on process will be the same as usual and although you will be asked to confirm your nominated account details you will not be asked to provide these details.

As noted above, compensation will be paid into your nominated account (that is the linked account you nominated for your account with Icesave). Although instructions received via the Icesave website on or before 7 October 2008 to change the details of that nominated account will be processed, no further changes will be possible if you wish to receive payment in this way. This is for your security.

We are aware that some customers will not be able to take part in the electronic payment process for a variety of reasons, such as not having a nominated account set up, or where notification has already been given to Icesave that the account holder is deceased. We have tried to identify these account holders and will begin sending out application forms to them from mid-November 2008 onwards. If you fall into this category, you do not need to take any further action at this time. The non-electronic process will be slower (we aim to complete this process as far as possible within 6 weeks of receipt of a completed application form), but you will receive the same amount of compensation no matter which process you use (unless you hold a fixed rate savings account and opt to await payment until the end of the term).

The Icesave systems were not designed to pay all deposits at once. The electronic payment process will be phased to manage the demands on the systems and in the interests of security. Over the next three to four weeks, depositors will be sent a further email inviting them to initiate the payment process. These emails will be phased and sent in batches. Once you have received this invitation email, please log in and follow the instructions on the Icesave website as soon as possible after receiving your invitation email. If you do not receive this second email by 4 December, please contact Icesave’s Customer Services Helpline on 0845 605 8050.

This electronic payment process will operate on the following basis:

1. You will need to log on and access your account as usual. The same security measures will apply, including your User ID, unique password and memorable information. You will be guided through a process where you will be asked to confirm the balance of your Icesave account, and then make your application for compensation. This process will take a short while to complete, and you should be paid your compensation within five working days of completing the application.

2. For instant access account holders, you will be able to be paid into your selected nominated account. You will be paid the principal sum and interest accrued up to and including 7 October 2008.

3. For ISA holders, the same process will apply as for instant access account holders. An ISA certificate will follow by post to allow you to reinvest that sum in an ISA with another provider. The money you held in your ISA will not lose its tax-free status if you reinvest by 5 April 2009. You should receive your ISA certificate within 2 weeks of claiming compensation using the electronic process and you will have to give this certificate to your new ISA provider when you open your ISA with them. You should ask for an ISA transfer form from your new ISA provider.

4. For fixed rate savings account holders, Icesave offered a range of accounts which are not repayable in full before their maturity (in some cases for up to three years). If you wish, you will be able to use the same electronic payment process to be paid the principal sum plus interest on that sum up to and including 7 October 2008. In other words, you do not have to wait until the end of the fixed term to have your money back. As above, payment will be made to your selected nominated account. On the other hand, if you prefer to wait until the end of the fixed term, and receive interest which would have been due at maturity, the electronic process option is not available to you. However, you should still log on to the website and tick the appropriate box to confirm that this is your wish. At that time, we will be notified that you wish to wait until the end of the fixed term and we will then send you an application form to complete and return to the FSCS. As described above, this process will be slower, although we aim to complete this process so far as possible within 6 weeks of receipt of a completed application form, with payment following the maturity date of the account. You should also be aware that if you hold a fixed rate savings account that pays interest on a monthly, quarterly, or annual basis, and you decide to hold that account until maturity, you will not be paid any interest prior to maturity.

5. If the account you hold with Icesave is a joint account, the invitation email will be sent to the first named account holder, in accordance with the account terms and conditions. This will enable your joint savings to be paid to the first named account holder. As described above, electronic payment will be made to your selected nominated account. If you do not wish payment to be made in accordance with the account terms and conditions, you will need to inform the FSCS and we will send you a paper-based application form to complete.

When you access the Icesave website to proceed with the payment process, you will be asked to confirm your identity and the details of your selected nominated account. In addition, before the payment can be made, you will be asked to confirm that you accept the payment in satisfaction of your claim for compensation against the FSCS, and to confirm the transfer of your claims against the DIGF, Landsbanki Islands hf or any other party in connection with your Icesave account to the FSCS. This will enable the FSCS to seek to recover the cost of paying compensation to you from the DIGF, Landsbanki Islands hf or any other relevant party.

We hope that this communication has explained what to expect. Please now wait for the next email which will invite you to seek payment of compensation. You do not need to do anything more until you receive your next email.

We believe this electronic payment process best meets the needs of the vast majority of Icesave account holders by offering a relatively quick payment mechanism and avoiding the inconvenience of completing paper application forms and awaiting payment by cheque.

If you have any questions, please contact FSCS’s Customer Helpline on 0845 7300 131 (Icesave enquiries only). If you have any queries regarding the online operation of your Icesave account, please contact Icesave’s Customer Services Helpline on 0845 605 6050.

Yours faithfully

FSCS

Last Tuesday, I awoke to the news that Icelandic bank, Landsbanki, had be nationalised, it was in the hands of the receivers and was expected to go into liquidation. For me, this was a disaster! I'd put a sizeable chunk of my cash in my IceSave account - IceSave being a UK subsidiary of Landsbanki. And, what's more, IceSave had stopped depositors making withdrawals.

At first I was concerned, but I knew that I could claim my money back from the Icelandic financial services compensation scheme so I thought I may lose a little interest but at least my money's safe. Checking up with the news, I was gutted to find out that the Icelandic economy was in turmoil and the Icelandic Prime Minister had said it would take care of domestic depositors but this guarantee did not extend to International customers.

My heart dropped! I was worried, anxious and felt like crying - as a grown man, being close to tears is hard for me to admit but that is exactly how I felt. My hard-earned savings were lost and there was nothing I could do about it. Fair enough if I had put my money in shares or other riskier investment vehicles - that would be a bitter pill but manageable - but this was a savings account with a regulated financial institution. On top of the sadness and anxiety, I also felt angry and cheated and helpless.

Further investigation revealed that the Icelandic compensation scheme did not have enough reserves to fulfil it's obligations. I thought about taking legal action against the Icelandic authorities but what would be the point of suing an organisation with no money? I began to wish that maybe I should have been more diligent or even just spent the money or put on my mortgage. At least the cash would have been put to good use.

Fortunately, I was extremely busy at work so it helped to take my mind off it. When I got home and told my wife, she was extremely supportive (as always). I was convinced our money was gone and couldn't stop blaming myself but she was a tower of strength and made me feel a bit better about it - and for that I am extremely grateful and consider myself very lucky.

The only ray of light was rumours in the news that the British Financial Services Authority (FSA) would step in to help. There was a chance that they would compensate savers up to the £50'000 covered by their compensation scheme. Although this would have helped me, I felt gutted for those that had deposited more than this figure in their IceSave accounts.

That night, I was restless with worry and didn't sleep very well.

First thing the next day I checked the news but there was no update about IceSave accounts, however there was a press conference scheduled by the government to address the issue.

A little later, I checked the news again and read that the chancellor had guaranteed that no IceSave Saver would lose their deposits. I cannot describe to you the relief I felt. A cliché, I know, but it felt like a huge weight had been lifted from my shoulders. If Alistair Darling had been in the room I would have given him a great big kiss! I was almost brought to tears again!

Since last Wednesday, I've had chance to reflect upon the situation and think about what lessons I could learn from the experience. Despite Landsbanki having an excellent credit rating up until it went bust, I feel that the 'writing was on wall', as it were, with regards the Icelandic economy. Unfortunately, the warning signs were very well hidden and perhaps impossible to see without thorough research. I think that my due diligence was lacking and spending more time and effort on it could have avoided the situation. A number of people started to withdraw their cash the week before, whilst I was completely oblivious to the situation. These people, I applaud and aspire to be like them.

A week on from this crisis and IceSave depositors are no closer to finding out when they will get their money back or how they go about claiming it. The government have frozen Icelandic assets in the UK and are in discussions with the Nordic "powers-that-be".

I am extremely pleased with the British government for digging me out of this hole and assuring me I will get my savings back. Now I am just hoping for a speedy announcement from them telling me what I need to do next so that I can get the wheels in motion for a quick recovery of my money.

I am worried sick and feel like crying.

IceSave's parent company, Landsbanki, have gone under the control of the Icelandic government and the security of UK savings accounts remains unclear. I have two accounts with IceSave.

I am providing updates on the situation over on my IceSave Review page.

I need to take a lot of deep breaths to stop me from cracking!

Arkad

This series of articles was inspired by a wealth-building strategy created by Stuart Goldsmith. It is called 'Double Your way to a Million Plan' and you can sign up for your free copy on this webpage. For a brief outline of the strategy, take a look at this post.

July to September has been a bad quarter for my Doubling project. I've been very busy with my day-job and my growing family seem to be taking up a lot more time just lately. In addition, one of my main sources of income (IceSave) has dried up - they've reached their quota for the year but hope to continue the campaign in 2009.

I've managed to roll out a couple of new ideas (FABDEX and Financial-Info) and have been working on promoting a new ClickBank product but haven't really had time to promote them properly - or monetize them. Here's a breakdown of the quarter's results:

Income
Advertising on my websites£1071
Interest£25.94

Total£1096.94

The IceSave promotion bought in the most cash with the remainder coming from Matched and Money4Banners.

There are also a couple of income sources that have been earned but did not make this quarter's results in time. I have a Clickbank cheque sitting in front of me for around £100 and there is about $120USD (£60) sitting in my Google Adsense account awaiting payment.

Expenses
Web Hosting & Domain Names£55.74
NICS (Class 2)£29.90

Total£85.64

For those not accustomed to Class 2 NICS, it's a fixed National Insurance Payment to the taxman that us British self-employed people have to make each week.

Profits
£1096.94 - £85.64 = £1011.30

I decided in January, to pay myself a wage for my Doubling exploits equal to one third of profits earned. This month, I have chosen not to take any payment from my project for a couple of reasons. Firstly, I have not put in as much work into the project as I expect of myself and feel I do not deserve a share of the profits. Secondly, heading into the final quarter I am concerned that I may not achieve my 2008 goal of completing up to Step 20 of my Doubling project, so I want to throw everything that I can into it.

I've guesstimated that another third will be deducted as taxes but I won't need to account for this until the end of the financial year so (at least for now) it's mine

Before this quarter, I had earned £1648.31 for my Doubling Project, so adding my latest earnings to this, I now have £2659.61. This means I've completed Steps 19 of the 28-step process and am now part-way through Step 20.

Now I just have to figure out how to earn an extra £2340.39 before year-end

Step 19 Complete
Step 20 In Progress
Cumulative Cash: £2659.61