4 November 2008


Dear Icesave customer


Landsbanki Islands hf, the Icelandic bank which operates the Icesave product in the UK (Icesave), was declared to be in default by the FSA on 8 October 2008 for the purpose of the Financial Services Compensation Scheme (FSCS). In a statement on 8 October 2008, HM Treasury confirmed that all depositors in Icesave will receive their money in full. FSCS is managing the payout and is about to start an accelerated process to pay compensation to Icesave customers.


FSCS has put in place a system that allows customers to be paid compensation through an electronic payment into their nominated accounts. To do so, customers will need to log on to their Icesave accounts, using their existing User ID, unique password and memorable information.


The process will happen in stages:

  • First, FSCS is emailing all Icesave customers to explain in detail how the process will work. This email will not ask for any personal or account details and requires no action on customers' part.
  • FSCS will then contact customers by email again over the course of the next three to four weeks with instructions on when they can access the system and how to complete the short online process to be paid compensation. Please note that access to the site will not be possible until you receive this second email. This is to allow us to prepare the site for the electronic payment process.

It will only take customers a short while to complete the necessary steps to be paid compensation. Once the necessary steps are completed, the payment transfer using the BACS system will take about five working days to complete.


Any customers (including customers with fixed-rate savings accounts who wish to be paid out at the end of the term of their deposits) who do not wish to use the electronic process described above can opt instead to complete a paper application form (which we aim to process so far as possible within 6 weeks of receipt of a completed application form) and receive their compensation from the FSCS by cheque. Customers with fixed rate savings accounts should be aware that if they decide to be paid out at the end of the term of their deposit, they should log in when they receive their second email to confirm this and that they will not be paid any interest prior to maturity.