KSFIOM failure 'unfortunate, isolated event'

The KSFIoM debacle

What the IoM government says in response to the campaign DONT BANK ON THE ISLE OF MAN is typically misleading. Only depositors with less than £50k will get their money back from the first assets recovered, and anyone with deposits between £50k & £201,613 will get £50k under the compensation scheme but will have to wait up to 6 years to get up to 75% back. That 75% is a conservative estimate as fees & legal costs will gobble up at least £30million. The video campaign is primarily to warn other people of the risks of depositing in the Isle of Man. It has no bank of last resort & its compensation scheme is seriously flawed. Besides, there is now a growing international campaign backed by the OECD & other major financial organsiations to crack down on jigerypokery in offshore financial centres. Cayman Islands are in deep trouble & the IoM could soon be as the naughty boys & girls & businesses with secret shell accounts & dodgy trusts remove their money to hide it in other secrecy jurisdictions. KSFIoM depositors were mainly British expat taxpayers who had no option other than to bank their savings & pensions offshore as UK banks would not let them bank onshore as a matter of policy as they did not reside in the UK. This was a consequence of anti-terrorism legislation. The Treasury Select Committee has called on banks to review this policy but so far few banks have changed it. Jim http://www.kaupthingiom-dag.co.uk

Posted by: Jim

Ms

I agree this artical is misleading.. we are not getting 100% of our funds back at this stage look how long we have had to wait so far??? ITS IN THE WORDING.. Who has our Money it was in a SO called AAA LISTED Bank so what happened Trust is what happend a very big Lack of it!... your money is not your own be very Careful Dont Bank on the Isle of Man.. People I Trusted who are deemed Professionals in the Finance Industry have messed up Big Time due to mismanagement and GREED. I am of English decent back as far as Ancestry Goes... I live in the Uk and have paid my Taxes over many years, NO choice and left Homeless at Christmas 2008. An abomination and a Down right disgrace! There should be compensation for every Depositor who has suffered in this Debacle..

Posted by: Dawn Richardson

This is NOT an "Isolated Event"

The demise of the bank and total mishandling of the entire KSFIoM affair is NOT an "isolated event" on the Isle of Man, as stated by John Spellman. The Isle of Man have actually got a long track record of failed banks under their "care" but they have serially abandoned depositors to their fate. I give you SIB and BCCI as just a couple of the more recent examples of bank failures on the island. Not once in the history of all the failed banks in the Isle of Man have depositors seen all of their savings returned to them. Rather, they have waited years to receive a small percentage of their deposits trickle back from the liquidators. In the case of SIB, depositors waited over 23 years to recover just 29p in the pound. The Isle of Man Depositor Compensation scheme is flawed and ineffective. There is no bank of last resort on the Island. As sure as eggs are eggs if you happen to put your savings in an Isle of Man bank that fails, you WILL wait many years to recover only a small percentage of your deposit. Don't bank on the Isle of Man to compensate you 100% when their banks fail. They are more than happy take billions of pounds a year from depositors (2007-8 circa £52 billion deposit base) but beware, you have a realistic chance of never getting all your savings back. http://www.guardian.co.uk/business/2005/dec/24/accounts.money http://www.archive.official-documents.co.uk/document/cm41/4109/d-chap17.htm http://www.tax-news.com/archive/story/Isle_Of_Man_Repays_60_To_BCCI_Depositors_xxxx4933.html

Posted by: Captain Sensible

Mrs

We deposited our savings in the Isle of Man because there was no option of having a UK bank account without a UK address. The Isle of man pushed their triple AAA credit rating and allowed the bank to function but they omitted to regulate the banks' actions. They have taken the stance to delay the payment to depositors for nearly a year and then after the DCS has been paid the funds will be reclaimed from the liquidator. The IOM Gov have incurred massive expenses for the depositors by their dilly dallying but have not as have all other european governments paid depositors 100% of their savings and then taken action to recoup their losses from the organisations they should have been regulating! Shame on the Isle of Man who continue to tout have wonderful they are?? Susan and very unhappy KSFIOM depositor.

Posted by: Sue Morley

The IOM Government seems to have a short memory

the Isle of Man Government allowed this bank to promise depositors that their money was 100% safe. They touted a "parental guarantee" and talked up the banks' AAA credit rating to potential depositors. I am one of the many temporarily ex-pat Brits who couldn't find a bank that would take them in the UK, and so was forced offshore. Now that the bank has collapsed and our savings have been lost, we discover that the "parental guarantee" didn't exist and the IOM Government talks about how depositors didn't understand the risks involved with saving in the Isle of Man. That'll be because we were assured that there wasn't any risk! When will they face up to their responsibilities, as other governments have done, and end this misery by paying everyone 100% back? They have several ways in which they are able to do this, but have chosen not to.

Posted by: brokefirefly

ksfiom failure

The isle of man should be ashamed of themselves, for gods sakes people have to sit back in misery and see proceeds of their homes and bits of it come back in scraps every year.

Posted by: Amanda Bailey

Mr.

The IOMG is being less than forthright. It was they who permitted the Derbyshire Building Society to sell in late 2007 its IOM subsidiary Derbyshire Offshore to Kaupthing hf of Iceland who incorpoarted it with its existing IOM subsidiary Singer and Friedlander. The Derbyshire Building Society was thus allowed to be released from its 100% guarantee to depositors with Derbyshire Offshore ( a significant proportion of the depositors currently with KSFIOM ). The replacement 'guarantee' provided by Kaupthing hf has proven to be worthless and indeed legal advice is understood to be that the terms of the guarantee were flawed and hence even before Kaupthing hf collapsed it was worthless ! Depositors with term deposits ( typically 12 months ) with Derbyshire Offshore were given no opportunity to withdraw their funds without penalty on takeover by Kaupthing hf. There are still no provisions in place to prevent IOM subsidiaries of UK banks and building societies from being similarly sold off with depositors' funds 'protected by similar worthless guarantees. BE WARNED DO NOT BANK ON THE ISLE OF MAN !!!! To add to the sad story of the depositors in KSFIOM it was apparently a solvent bank which was 'persuaded' in late 2008 by a combination of IOM's FSC and UK's FSA to transfer the bulk of its liquid assets ( 550M pounds, about 50% of its entire assets) to KSFUK to 'protect' depositors' assests from Iceland.This was in breach of the articles of agreement of KSFIOM that limit not more than 25% of its assets can be deposited in any single financial entity. Alastair Darling put KSFUK into administration almost immediately thereafter and the funds from KSFIOM became part of the general assets of KSFUK to be distributed through liquidation. The IOM FSC had not bothered to have the funds 'ring fenced' for 100% return to depositors of KSFIOM !!! Hardly indicates a competent financial regulator. Again DON'T BANK ON THE ISLE OF MAN !!!

Posted by: Douglas Miller

Depositor/creditor

Spellman should learn from Thumper the rabbit - if you can't say anything nice, don't say nuthin' at all. This man should, together with those pathetic excuses of men Brown and Bell, hang their heads in genuine heartfelt shame for the misery they have heaped upon ordinary decent people who trustingly put their life-savings under the care of these morons. The IoM Government and its offices trumpeted their (ineffective) DCS scheme in every document they could print on the so-called benefits of banking on that treacherous island - and then walked away from confronting the rotten limey UK Government who set the whole scam up up in the first place. Thank goodness there are still places like this where former depositors reduced to morbid penury can still try to make a difference to their lot by shouting loud and clear about the shocking behaviour of public entities who should have taken care of their citizens, but chose otherwise. The UK and the IoM Governments are exposed for their downright anti-citizen behaviour begotten of rotten British behavioural characteristics in all their true and tawdry colours: DONT BANK ON THE ISLE OF MAN NOR IN THE UK. Lou

Posted by: Lou

Would You Bank on the IOM?

The finance indistry is based on trust and confidence. Given this debacle on IoM at the same time as depositors in UK banks are being fully protected by the UK government, would YOU take the risk? If I had my time again I would look forward to depositing in the IoM like a turkey looks forward to Christmas. Take my advice and avoid anything to do with this little island that has developed and ancouraged a finance centre it can neither support nor regulate.

Posted by: Gary

The IoM - scheming, deceitful, contemptuous & hypocritical

The more we learn about it the more we come to discover that it has a financial services industry that is built of smoke & mirrors on quicksand foundations. The banks & other fiancial institutions are off-shore for no other reason than to operate with lower costs in order to make higher profits. The way the Manx banks & finance houses advertise themselves is all smoke & mirrors designed to give the appearance of offering low risk security coupled with high returns on money placed there. The minute the benefits outweigh the cost these banks leave the island not on the next ferry (that's too slow) but on the next plane. The simple fact is that once you deposit money in the Isle of Man it ceases to be yours; it becomes the property of the bank. You are nothing more than an unsecured creditor, a liability to the bank because it owes you money. The question of trust does not come into it, so if the bank goes bust you can only fall back on a discredited depositors compensation scheme that can not pay out 'on demand' as it is not funded. Having lost your life savings you discover that there are secured creditors in front of you in the queue who will take what was once your money before you see a penny of it. Then you also discover that there's also those guys in wigs in front of you, & the government itself takes all it can from recovered assets what it has paid you in so-called 'compensation' By the time you get to the cashier there's a huge chunk of your money gone! The banks' information to potential clients is composed of 'smoke & mirror' advertising. The blurb is written to entice you to part with your money in their favour. You are a 'somebody' until you have parted with your money, then you become a 'nobody'. Unless you live on the IoM you are faceless - just a bank account number, a potential source of more money for them to make big money before you get your bit of interest. Then if it all goes wrong - tough! The bank's interest in you vapourises instantly. When KSFIOM shut its doors denying depositors their savings, did they get a letter of profuse apology from the bank directors explaining what had happened and assuring them that they would be living on bread & water until they had done everything in their power to see that you got your money back? No! Did they take a salary cut? No! Did they claim a bonus? YES! So now depositors have learnt at great personal cost, deprivation & suffering that the IoM - its finance houses, its government & its failed Finanial Supervision Commission,& its compensation scheme - is scheming, deceitful, contemptuous & hypocritical. There will be a day of reckoning. Jim 4Justice http://www.ksfiom-blog.blogspot.com

Posted by: Jim

The IoM is scheming, deceitful, contemptuous & hypocritical.

The more we learn about it the more we come to discover that it has a financial services industry that is built of smoke & mirrors on quicksand foundations. The banks & other fiancial institutions are off-shore for no other reason than to operate with lower costs in order to make higher profits. The way the Manx banks & finance houses advertise themselves is all smoke & mirrors designed to give the appearance of offering low risk security coupled with high returns on money placed there. The minute the benefits outweigh the cost these banks leave the island not on the next ferry (that's too slow) but on the next plane. The simple fact is that once you deposit money in the Isle of Man it ceases to be yours; it becomes the property of the bank. You are nothing more than an unsecured creditor, a liability to the bank because it owes you money. The question of trust does not come into it, so if the bank goes bust you can only fall back on a discredited depositors compensation scheme that can not pay out 'on demand' as it is not funded. Having lost your life savings you discover that there are secured creditors in front of you in the queue who will take what was once your money before you see a penny of it. Then you also discover that there's also those guys in wigs in front of you, & the government itself takes all it can from recovered assets what it has paid you in so-called 'compensation' By the time you get to the cashier there's a huge chunk of your money gone! The banks' information to potential clients is composed of 'smoke & mirror' advertising. The blurb is written to entice you to part with your money in their favour. You are a 'somebody' until you have parted with your money, then you become a 'nobody'. Unless you live on the IoM you are faceless - just a bank account number, a potential source of more money for them to make big money before you get your bit of interest. Then if it all goes wrong - tough! The bank's interest in you vapourises instantly. When KSFIOM shut its doors denying depositors their savings, did they get a letter of profuse apology from the bank directors explaining what had happened and assuring them that they would be living on bread & water until they had done everything in their power to see that you got your money back? No! Did they take a salary cut? No! Did they claim a bonus? YES! So now depositors have learnt at great personal cost, deprivation & suffering that the IoM - its finance houses, its government & its failed Finanial Supervision Commission,& its compensation scheme - is scheming, deceitful, contemptuous & hypocritical. There will be a day of reckoning. Jim 4Justice http://www.ksfiom-blog.blogspot.com

Posted by: Jim

Ms

How can John Spellman continue to distort the truth and further mislead people? Clearly, from Captain Sensible's comments, the Isle of Man has NEVER been a safe place to bank! Thousands of CAREFUL people who had read all the comforting blurb about parental guarantee, top credit rating, etc, etc, were lead up the garden path - to misery and ruin. Shameful, disgraceful, unbelievable! And STILL the governments fail to act to end this sordid affair. DON'T BANK ON THE ISLE OF MAN!

Posted by: rinkydink

To_the_readers

Who do do you choose to believe: The spinmaster (Spellman) whose job is to spin, or the depositors? As a depositor I wouldn't spit on Spellman, he takes his few crowns and ambles on, he doesn't care and from his comments it is clear that he is either dissembling or an idiot. He seems unable to place himself virtually in the place of those who have lost 50% of their life saving. He is contemptible. But then so has been the government of the IoM. You decide. PLEASE don't bank on the IoM.

Posted by: Screwed_by the_IoM

More Spin from the governmnent

Spinning Spellman - yes 75% of depositors will get ALL their money back in a few days -- WHY - bacause they probably live on the Isle of Man and had LESS THAN £50000 in the bank. That takes care of his next term in office. BUT what of the other 25% who had more than £50000 deposited who only stand to get 24.8% of their deposit back in a few days - BUT what of the rest of their money that they need to have back - the other 75%. 6 years they say and then not ALL of it - probably only 75% of the original deposit!! How good it that? - not a lot if you are wanting to pay for the care of your elderly & infirm mother and she needs the care NOW. I don't know a business in the world that would give you credit for 6 years ( without interest) SO WHY SHOULD THE INNOCENT DEPOSITORS GIVE CREDIT TO MR SPELLMAN?? That is what it ammounts to, extended credit to the Isle of Man government by innocent tax paying depositors for millions of pounds.

Posted by: Frozen depositor

Immoral and Unethical

The IOM government is very smug and proud of itself - it claims that 75% of depositors will get all their money back. This is true of only those who had less than 50,000 pounds deposited. Others, such as myself, had more and I am still waiting to hear a justification for what can only be described as the theft of depositors' money from the IOMG and the British government. Denying depositors access to their own savings is immoral and unethical and any government that fails to take the correct measures against a bank that defaults on its obligations to its depositors is immoral and unethical too. It is unbelievable that in this day and age innocent people can lose their money to the chicanery of governments in collusion with banks. Some people some where are making massive profits from this debacle

Posted by: Podcar

IOM's regulatory failure

Spellman's claim that the bank's failure was "... as a result of actions overseas beyond our control" is rubbish; the crucial factor was an error committed by the Isle of Man's regulatory authority, the FSC. KSFIOM's failure was primarily due to the fact that it was unable to access its own assets. These assets, which amounted to over half a billion pounds, had been transferred and deposited UNSECURED with KSF in London on the authority of the FSC. The unsecured assets were subsequently frozen by order of the UK Treasury. Irrespective of the arguments surrounding the UK Treasury's action, the inescapable fact remains that the assets should not have been deposited in an unsecured state in the first place. Apologists for the FSC claim that it is easy to be wise in hindsight; however depositors have a right to expect the relevant regulatory body to act with foresight and make every effort to ensure that a bank's assets are secure at all times and in all circumstances. But despite the irrefutable fact that their FSC made an inexcusble blunder, the Manx government, to the dismay of depositors worldwide, has stubbornly and cynically refused to accept any responsibility in the matter.

Posted by: JayJay

KSMIOM Failure an Unfortunate Isolated Event

Rather than being an unfortunate isolated event the catastropic collapse of KSF IoM was due to the stupidity of IoM regulator John Aspen and directors of KSF IoM sanctioning the transfer of half a billion pounds of depositors money(half of KSF IoM's assets) to the UK for safekeeping without any protection or guarantee from the UK Government that these assets would ever be returned. Rather than being held to account for his stupidity John Aspen was rewarded with a salary increase. This in my view shows the contempt and disregard that the IoM Government has for the KSF IoM depositors. Depositors that are concerned about their hard earned savings should consider other alternatives to banking on the IoM.

Posted by: Cheated Canuck