Icesave savers on first step getting cash back

Icesave customers will receive emails this week on how they can get their cash back.

The Financial Services Compensation Scheme (FCSC) will be sending emails to the 230,000 UK savers with Icesave from this week explaining the process.

Compensation payments are expected to start next week.

A second email will provide instructions on how savers can log on to their existing Icesave accounts, complete a short electronic process and send their cash to a linked account.

Icesave customers have had no access to their cash since October 7th and until the UK government stepped in to cover the accounts after the Icelandic banking crisis - savers would have been forced to wait for payment from Reykjavik.

Loretta Minghella, chief executive of the FSCS, said: "We recognise that Icesave's customers have been anxious about their savings. We would like to thank them for their patience.

"We have been working hard to establish a way of compensating retail depositors of Icesave without the need for a paper-based application process.

"The automated payment process is expected to be in place in ten days time and the first payments are scheduled to start in the second week of November. We expect to offer compensation to the vast majority of retail depositors in November."

Normally the FSCS only guarantees savings up to £50,000 - or £100,000 for couples - but this limit was waived by Alistair Darling in the case of Icesave.

The FCSC is also warning customers they will not be contacting them by telephone or by email asking for bank account details - and any such contacts should be considered as illegal phishing attacks.

Any Icesave customers who do not receive their first email from FSCS by close of business on Friday should contact FSCS on 0845 7300 131.

Icesave was not fully covered by the FSCS because it was a branch of the Icelandic bank Landsbanki and not fully regulated by the Financial Services Authority (FSA).

Icelandic banks Heritable and Kaupthing Edge were regulated by the FSA and so accounts were transferred to ING Direct.

A few Heritable and Kaupthing Edge customers were not transferred to ING and they will be contacted by the FSCS shortly.