BIG NEWS FOR ICESAVERS

platypus said:
I'm not sure how you can read that from what he said.

You can invest however you want, but to invest without looking at the risks, and then expect 100% compensation? That is ridiculous.
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See post above yours - he really does believe that. The fact remains that Icesave was marketing ISAs, a UK only investment vehicle in the UK, I think it's not unreasonable to expect the same protection as vehicles that are entirely regulated by the FSA.

I'd be interested to know why some people are claiming Icesave was an illegal operation in the UK?
 
SoapSurgeon said:
His warnings were only added after the whole credit crunch/ northern rock started happening. I invested before this.
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Icesave's huge marketing, slightly viral, campaign only kicked off in around spring time from what I remember. I think it's unreasonable to expect MSE to have information and advice on this bank so quickly when very little was known about it. It probably took him a month to piece together the information. And even then he isn't exactly going to put "OMG DO NOT INVEST THEY ARE FRAUDSTERS" on his web page is he? Because they would have sued him, probably. Anything he puts on there is written delicately to make sure he doesn't open himself up to legal action.
 
awaybreaktoday said:
Iceland had problems before the credit crunch, the country fully lives of debt, Icelanders fully rely on borrowing in general and have always done so.
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I will put my hand up and say that I did not know this. As I have already stated, all my information came from MSE and this was most definitely NOT explained - the Icesave account was one of his 'best buys' for months without mention of the trouble Iceland was in. He even states that he would bet Accrington Stanley will win the FA cup before a bank goes bust...

I will in future do more investigation into where I save my money but considering I had no reason to doubt the advice I was given on MSE I feel slightly let down.
 
scorza said:
See post above yours - he really does believe that. The fact remains that Icesave was marketing ISAs, a UK only investment vehicle in the UK, I think it's not unreasonable to expect the same protection as vehicles that are entirely regulated by the FSA.
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Not unreasonable no, but to invest money in an institution and not even check if its a member of the FSCS? That is stupidity.

I'd be interested to know why some people are claiming Icesave was an illegal operation in the UK?
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I think its more their methods, and that it has become apparent that the Icelandic government may have been acting in cahoots with them as a potential way out of their financial disaster.

SoapSurgeon said:
I will put my hand up and say that I did not know this.
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Which is great. I'm not trying to be harsh here, but thanks a lot. We would feel much better knowing that you made a mistake whilst our taxes are paying off your accounts. Lucky for us ING stepped in.

I will in future do more investigation into where I save my money but considering I had no reason to doubt the advice I was given on MSE I feel slightly let down.
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You have every right to feel let down, and the key is to learn and move on. But you would have still gone through the FSCS to get your money back, wouldn't you?
 
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NathanE said:
Icesave's huge marketing, slightly viral, campaign only kicked off in around spring time from what I remember. I think it's unreasonable to expect MSE to have information and advice on this bank so quickly when very little was known about it. It probably took him a month to piece together the information. And even then he isn't exactly going to put "OMG DO NOT INVEST THEY ARE FRAUDSTERS" on his web page is he? Because they would have sued him, probably. Anything he puts on there is written delicately to make sure he doesn't open himself up to legal action.
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No, but on the other hand, if he didn't know anything about the bank don't advise his millions of subscribers to invest their money in there!!

I took advice off someone who has far more knowledge about these things than I do, no reason to doubt him. I am not trying to blame him for this, I make my own decisions. I am just trying to explain to people how I (and others) ended up investing in an Icelandic bank!
 
My girlfriend has £18k invested with IceSave. She assumed that the money was fully guaranteed.

It's not even like IceSave's rates were that much better though. The last time I invested money, IceSave were offering 7.15% whilst Nationwide were offering 7.00%. I didn't think it was worth the risk for 0.15% and so invested my money with Nationwide. I'm really glad I did now.
 
SoapSurgeon said:
No, but on the other hand, if he didn't know anything about the bank don't advise his millions of subscribers to invest their money in there!!

I took advice off someone who has far more knowledge about these things than I do, no reason to doubt him. I am not trying to blame him for this, I make my own decisions. I am just trying to explain to people how I (and others) ended up investing in an Icelandic bank!
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I totally agree. A lot of people got duped into Icesave. My mate opened an account with them in June I think it was. When he mentioned it to me and that he was going to put his a very large sum of cash with them I did some research. I just typed it into Google and there was page after page after page of people discussing them and the vast majority were highly sceptical and critical of Icesave. Then I did some more Google's to learn about Iceland's economy. And that pretty much led me to advise him to not put his money there. The 7% rate was just too good to be true. Considering the BoE base rate at the time was ~5%! Where as this extra 2% magically coming from?! :D My friend also had no idea that banks could go bust or even that compensation schemes existed.
 
scorza said:
This is getting stupid now. So we can't invest in foreign countries without doing our own personal analysis of that country's economic prospects? Ridiculous.
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Why is it ridiculous? It's utterly ridiculous, and naïve, to trust your money to any tom, dick and harry that claims to give you a nice percentage back.

I'm not even suggesting that you specifically look at all the ins and outs of every countries economy, you don't need to do the actual figure work yourself, but pay attention to the financial reports in papers and so on. Iceland's economy has been dodgy for a few years and a significant part of their economy is dependant on their banks.

Just 5 minutes searching in google news comes up with these interesting articles:

http://www.iht.com/articles/2007/06/12/bloomberg/bxatm.php

So in 2006 they were at the point of collapse, they looked to have recovered by June. Still dodgy being only just recovering.

http://www.marketwatch.com/news/sto...x?guid={20B1DD8B-0EE5-483E-BF47-18C0EDED79D5}

Oops, by November '07 they've gone to poor from stable on agency ratings.

In particular this bit is interesting:
The change in outlook is "another blow to the Icelandic markets," said Lars Christensen, a senior analyst at Denmark's Danske Bank, in a research note.
"There is not that much optimism going forward, taking into account the health of the Icelandic economy given the large imbalances of the economy and financial markets," Christensen said.
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http://www.iht.com/articles/2008/04/02/business/icebank.php So the government in April felt it was essential to start telling people how safe the economy was, despite the fact that:
The three biggest banks in Iceland have expanded beyond the borders of the $16 billion economy, financing their growth by selling debt.

Higher credit costs on world markets, which are making that strategy more costly, have raised concern about that strategy. The three lenders account for about 80 percent of Iceland's gross external debt, five times greater than gross domestic product.
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The Beeb had a report on events at that time:
http://news.bbc.co.uk/1/hi/business/7326063.stm
pointing out that "The ratings agencies have expressed concern that Iceland may have to support the country's banks to avert a possible financial crisis."

Things were beginning to look rather dodgy come June '08:
http://www.forbes.com/2008/06/25/iceland-banking-credit-biz-bizcountries08-cx_pm_0626iceland.html

By September the crash was looking to be rather close:
http://www.forbes.com/markets/feeds/afx/2008/04/09/afx4869517.html


So even purely by looking at the last year or so's news even a blind man could see that investing your money in Icelandic banks came at a risk. Anyone investing under those circumstances is either taking a gamble based on the risks, or being foolish with their money for not paying attention to the risks involved with where they were putting it.
 
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NathanE said:
I totally agree. A lot of people got duped into Icesave. My mate opened an account with them in June I think it was. When he mentioned it to me and that he was going to put his a very large sum of cash with them I did some research. I just typed it into Google and there was page after page after page of people discussing them and the vast majority were highly sceptical and critical of Icesave. Then I did some more Google's to learn about Iceland's economy. And that pretty much led me to advise him to not put his money there. The 7% rate was just too good to be true. Considering the BoE base rate at the time was ~5%! Where as this extra 2% magically coming from?! :D My friend also had no idea that banks could go bust or even that compensation schemes existed.
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But my point is I am not an expert at all this. I looked for information from someone who, by all accounts, was an expert. He said it made sense to invest, it was in fact his 'best buy'. I invested. Seeing as he was an expert I figured he knew what he was talking about so didn't look elsewhere for information. Maybe I am starting to blame him... :p
 
platypus said:
Not unreasonable no, but to invest money in an institution and not even check if its a member of the FSCS? That is stupidity.
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It's not stupidity, until last year with Northern Rock, a bank going out of business was unthinkable. The paradigm in this country for a long time was that you didn't need to worry about FSCS and the FSA for savings, therefore you can't blame people if they didn't.

Clearly the system hasn't worked - lax regulation has allowed Icesave to operate in the UK without offering the sort of protection required.
 
OoOverclockaoO said:
Up 51% at the mo on my live screen :D
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YIPPIE!!! Bring it on, just trying to guess the best time to sell again, however wih TSB offering £3 a share technically its free money at the min. Do you think its price will get back to 2.20 - 2.80 mark sometime next week, 1 - 1.5 rate drop on thursday may see it hit 2.50 by friday.
 
scorza said:
It's not stupidity, until last year with Northern Rock, a bank going out of business was unthinkable. The paradigm in this country for a long time was that you didn't need to worry about FSCS and the FSA for savings, therefore you can't blame people if they didn't.
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Garps post sums it up pretty well.

Ten minutes with a web browser would show even the most lackadaisical investor that investing in Iceland was, at best, a risk. Whether or not people ever imagined they would need to take advantage of the FSCS is pretty much irrelevant. There is still that element of risk.

This has evolved though, but I believe original point still stands; that for the chancellor to fully guarantee those deposits was a terrible decision.
 
Here is what MSE wrote on Icesave in April: http://blog.moneysavingexpert.com/2008/04/01/icesave-how-safe-are-your-savings-facts-and-myths/

Pretty funny in hindsight.

Icesave back in April said:
“Icelandic banks pay into a fund which is set aside to be paid out for compensation should it be needed – the UK scheme doesn’t have this and could therefore technically take longer than the Icelandic scheme!” (Note from Martin: The UK scheme is set up to call money in if needed, rather than work on a pot of money system).

All talk of compensation schemes is purely hypothetical because they have never been used, but given the above, there is no reason to assume that the Icelandic scheme would be any more complicated or take longer.

In the extremely unlikely event that the Icelandic government wasn’t in a position to meet all claims, all the Nordic countries have an arrangement where they will step in and help any one of the participating countries that are in trouble so there is an additional layer of reassurance and cover.

If you could make it clear that Icesave customers are fully protected up to £35k the same as customers of any UK bank and that they will be paid as quickly I’d be very grateful!”
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