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ING Direct Picks Up Kaupthing Savings

Laura Starkey

By

Laura Starkey

My latest blog

The Credit Crunch Hits Corrie!

2

14 November 2008

Published in Savings on 8 October 2008

Another day, another take-over: ING Direct is to buy up £3bn worth of British savings held by Kaupthing Edge and Heritable Bank.

The UK arm of Netherlands-based ING Group, ING Direct UK, has taken over £3bn worth of savings accounts from two Icelandic banks -- Kaupthing Edge, the UK arm of Kaupthing Bank, and Heritable Bank, owned by Landsbanki. 

Landsbanki folded yesterday and Kaupthing is in deep trouble this morning. Chancellor Alistair Darling told the House of Commons at lunchtime that the savings accounts operated by Heritable Bank and Kaupthing Edge in the UK have been transferred to ING Direct. This should be welcome news for savers as the credit swap rates for ING suggest that the Dutch bank appears to be safe. Savers with Kaupthing no longer need fret about whether their bank is about to go under.

How are ING accounts regulated?

ING Direct’s customer deposits are safeguarded using a ‘passport’ scheme -- which means that, up to a certain limit, customers’ money is assured by the Dutch government rather than our own Financial Services Compensation Scheme (FSCS).

The Dutch government increased the maximum limit on its savings protection scheme yesterday. As a result, the first €100,000 (approximately £77,700) of ING Direct customers’ savings is guaranteed by the Dutch Investors Compensation Scheme. Effectively, this means that the official level of protection on offer outstrips that from the FSCS (which now offers a £50,000 guarantee).

However, after Alistair Darling’s dramatic announcement this morning that 100% of Icesave customers’ money will be returned to them, I’m not sure theoretical guarantees like this really mean very much in practice. It looks like the Chancellor is willing to compensate all UK savers if they lose money. (Although he hasn't issued a formal 100% guarantee.)

None of the banks involved in the take-over deal are currently willing to comment on the move, or give details of what it will mean for savers.

However, as soon as more information becomes available, I’ll update this article with the news.

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Comments

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MuppetKeeper 08 Oct 2008, 1:36pm

Hi all out there. Having just seen my Icesave ISA go bang, I tried last night to get some of my £10k out of Kaupthing edge last night, as I really need some money, and can't wait the 3 - 12 months it will take for the compensation schemes to pay off.

Now ING has bought Kaupthing, do we know if its in receivership, if its operating as usual or anything at all?

I used the online feature last night to request the £5k that isn't in a fixed savings account to be sent to me, but nothing seems to have changed on the account.

I can still log in and transact on the KE website, so at least thats switched on, but no evidence it does anything!!

Other peoples experiences welcome, I know answers are short, but someone may have seen something over the last few days.

Ta

MK

Niborpat 08 Oct 2008, 1:38pm

There has been a lot of bad mouthing about the Fool's advice and info. I have just transfered the bulk of my deposits out of Kaupthing Edge with no problems, and logged on to this site to hear the news that my money was safe. Any advice given is purely that and it is up to the individual to do their own homework. I personally would like to thank The Fool for their advice

MuppetKeeper 08 Oct 2008, 1:45pm

I'm in full agreement with Niborpat (even though the name is hard to type). I come here and other places for advice on things and to see the best on offer, but its my decision in the end.

I want out of KE / ING at the moment as I need ready cash, and can't wait for another bailout if that was to happen.

Also I'm thinking if the Icelandic government choose to walk away from their obligations (Icesave), I'm not going to support any company that feeds profits (hahaha, profits in this market) back to an Icelandic Company which will no doubt be taxed by the same government.

Back to Yorkshire Building Society for me!! You can actually visit the shoebox with your money in there (that's a joke people!)

Henley8 08 Oct 2008, 2:04pm

I'd like to echo comments made by Niborpat.

Motley Fool seems to have been one of the few places where information was up to date and advice given - well done.

I'd prefer to repatriate my modest sum to a UK based institution rather than leave it with ING and have just done that through the Kaupthing Edge website. The transaction was prcessed as normal, but I guess I'll have tpo wait to see if it appears in my bank in a few days. Here's hoping!!!!

occamsrazors 08 Oct 2008, 2:08pm

Would be great if anyone can find out what this means for savers with Kaupthing's Isle of Man subsidiary.... no news on whether the ING takeover includes them...

bobfruit 08 Oct 2008, 2:10pm

Two days and counting for a BACS Kaupthing Edge transfer. Did it before 2pm on Monday and had expected it this morning, but I guess tomorrow morning will be the telling time.

I've put a few comments on articles this week pointing out that The Motley Fool is a financial information site only. It's no substitute for a proper financial advisor for your particular needs or, indeed, doing the homework yourself. It makes me mad when I see people slating the site for doing what its always done.

I do, however, believe they should keep their comparison tools in-step with current events. I understand people's frustration at seeing IceSave near the top of comparison tables even after it had been announced that transactions were suspended.

My money's now staying in a UK institution too, for a while.

Imcke 08 Oct 2008, 2:13pm

Hi This is now no jolke for people with savings.
I have lost loads of money in shares peps etc.
Fair enough they were a risk still hurts losing 80% of value shares bought on scripts.
Now we find we can not get money out of savings accounts even if you asked before it shut down.
This is a real shame for the hard working savers of the uk. we were not gready had to spread savings around. as rubbish £35k / licence cover.
so £35 in B&B £35 Halifax £35 ING £35 Ice save £35 in Kaput! If you sold you house £250,000. You need 8 flaming accounts to put the money in. or risk loosing it. Great news you only need 5 now or 2.5 joint accounts.

dingle1000 08 Oct 2008, 2:14pm

Does anyone know if Ing bought Kaupthing edge in the isle of man as well as the mainland accounts?

Mujic 08 Oct 2008, 2:22pm

Does anyone know what is happening with Kaupthing Friedlander & Singer? (KSF)
As far as I am aware, Kaupthing Edge is a subsiduiary of KSF

deeplyblue 08 Oct 2008, 2:26pm

I don't suppose anyone knows this, and I have asked this question elsewhere with no real result, but ..

I transferred some money out of KE on Monday, and it shows up as having left the KE account. However, it hasn't yet shown up in my Halifax account. So, where is that tranche of my cash? Does it count as being in KE (whatever *that* means)? Does it count as being in the Halifax? Is the cheque in the post? Does that mean it should arrive in the Halifax eventually?

I left some money in KE (under the compensation limit), and a few minutes ago (after I heard of the collapse of KE from Mr Darling) I tried move a tenner out of the KE account - just as a test. The transfer appeared to go smoothly. Unfortunately I shall not find out, possibly until Monday or Tuesday whether or not that money has gone through.

So, when money is in transit, where is it? And if the bank at either end of the transaction goes belly up, is your money covered by the FSCS?

Mushy 08 Oct 2008, 2:37pm

Good question deeply blue re: money in transit. I pulled out all my (modest) savings with KE yesterday pm and the web site processed the transaction. I now have a balance of 0 at KE and am on tenterhooks waiting/assuming (?) that this money will appear in my UK account.

mayflyjules 08 Oct 2008, 2:46pm

Despite reassurances yesterday that money in Kaupthing Edge was safe, I decided to transfer out the few hundred pounds I had in my savings account with them (mainly because the rest of my savings are now in limbo with Icesave and I didn't want to risk losing all of it).

I carried out the transfer after 2pm yesterday and the notice on the website said that it would be transferred out on the next working day, however when I checked my balance this morning the money had not moved. I retried the transfer and again it appeared to be accepted and the messages indicated it would process today but the transaction did not appear on the list and the balance did not go to zero.

Verynervous 08 Oct 2008, 2:53pm

I am in the same situation as deeplyblue. I did 2 x Chaps xfers yesterday about 10.00 am from KE to HBOS one for £ 500 and 1 for £ 21,000 the remaining £ 500 I left with KE.

The 1st £ 500 went through OK but although the £ 21,000 has been debited from my KE account it has not reached HBOS. It is not in their pending system, Where is it ??? What can I do ? To me it is a large slice of our family's savings.

deeplyblue 08 Oct 2008, 3:02pm

@mayflyjules

I've just logged on to the KE site again, and my little test transfer (put through in the last hour) is showing up on the list of recent transactions.

You might re-check your transaction list, and make sure that you did remember to hit the Submit button after you'd put in the transfer details. I mention that as a possibility, after getting that one wrong myself a few weeks ago - it's easy to forget if the button is off the bottom of the screen and you're under pressure.

deeplyblue 08 Oct 2008, 3:05pm

About this ING takeover, does this mean that the KE bank will continue trading "as usual" but under new management? Does it mean that we can get hold of our money through ING?

Has anyone got through to either institution, or know of any official statements?

LuKeNuKuM 08 Oct 2008, 3:10pm

hi people,

im in the same boat - transferred out my balance from KE (via chaps) yesterday about 1pm - nothing in the target account as yet and the balance in KE is 0.

i spoke to my target bank's customer service and they couldn't see it pending.

no idea where the money is sitting now, slightly concerned that it's going to get lost with the ING takeover :-/ i've printed out the transaction list which at least gives a reference to follow up in the days/weeks/months/years?! to come.

it's probably a bottleneck but i wish i had it hidden under my bed now :)

Verynervous 08 Oct 2008, 3:21pm

Thanks deeplyblue, I have re-checked the site but the transaction has gone and has a xfer ID No. so presumeably like LuKeNuKuM above it is sitting in space somewhere !!
.

validas 08 Oct 2008, 3:43pm

in reply to Mujic: Kaupthing Singer & Freelander were
bought out by a company called Close Brothers Finance, and Close Brothers are apparently one of the largest finance providers in the UK. If that means anything today. Have been advised there is no problem.

Mujic 08 Oct 2008, 3:44pm

http://www.hm-treasury.gov.uk/press_102_08.htm

edmundpw 08 Oct 2008, 3:54pm

Well, I shifted my money out of Kaupthing Edge yesterday. Took the precaution of using CHAPS, even at a £20 fee, which meant the money arrived same day. Doesn't look like I'm going to be able to match the rate, or even get close, but I'm feeling risk averse right now.

edmundpw 08 Oct 2008, 3:56pm

Should have added that the money only came through at about 1755, which led to me being worried about it all afternoon and several phone calls didn't help. But when it arrived, I relaxed with a G&T - I'm sure there's no need to panic quite yet, guys!

FlaminBanks 08 Oct 2008, 4:02pm

I eventually got through to KE around mid-day and the bloke I spoke to had absolutely no knowledge whatsoever of any problems so it's worrying that the staff haven't been informed. Either that or he was blatantly lying...not sure which is worse.

However looking through the press release (thanks Mujic) it appears that the money is safe for the time being, but there are many questions:

* Will ING honour this month's interest payment on savings
* What changes will we see. Is it the same website or are we going to get ING accounts and if so how are we to access them
* Are they going to contact us with the full details
* If transfers are still permitted why is there such a delay on them arriving and what happens if it goes "missing".

I'm not looking for answers here, just airing my concerns

It's a minefield to know where to put your money these days. I specifically set up a number of accounts about six months ago to spread my risk, but now who can we trust.

beauwl 08 Oct 2008, 4:03pm

validas

in reply to Mujic: Kaupthing Singer & Freelander were
bought out by a company called Close Brothers Finance, and Close Brothers are apparently one of the largest finance providers in the UK. If that means anything today. Have been advised there is no problem.

Hi there. Please can you confirm the validity of this. What is your source of this information?

mayflyjules 08 Oct 2008, 4:06pm

Hi deeplyblue. On both occasions I definitely confirmed the transaction and pressed all relevant buttons until I got the "We confirm that we have received the following instructions..." screen, then I clicked Finished which returned me to the main screen. I just tried it again with a penny transfer to make sure and still none of the 3 attempts are showing on my transaction list. Maybe it just doesn't like me?? :-)

That said, I'm now OK with keeping the money there until the transfer to ING (or whatever is going to happen) as I'm in no hurry to get to my money, it's only the loss of interest that concerns me in the short term.

Magnus567 08 Oct 2008, 4:06pm

Just transferred out of KE and hope my cash has gone to my bank!!!!

MuppetKeeper 08 Oct 2008, 4:09pm

I give up, three times now I have "withdrawn" my money, and got confirmation (once yesterday, twice today) but my account still shows the full amount and nothing in the future transactions.

Anyone out there got any tips? Did your account go to zero (or whatever) immediately?

Ta

MK

Beckstones 08 Oct 2008, 4:10pm

Thanks Mujic...the HM Treasury link seems to cover everything and in my view this isn't a good time to risk not knowing where transferring funds might be.
I'm sitting tight but as an existing ING investor, will probably have to move funds eventually to stay within the Dutch limit, which incidentally seems to be more generous than our own.
There seems to be a distinct lack of information on this issue elsewhere...well done MF.

nkingsbury 08 Oct 2008, 4:11pm

Seems like Kaupthing Edge have a blockage, I initiated a transfer over the weekend and the money left my KE account on Tuesday and has not arrived in my Barclays account ....

steeviepuss 08 Oct 2008, 4:24pm

I too have a savings account with KE, cautionsly within the FSCS protected limit. I believe ING is under the passport scheme as opposed to the FSCS, I take it this now means we are no longer under FSCS protection & we'd have to claim under the Dutch protection scheme should ING go belly up? Is this likely to be a more lengthy process tham claiming through the FSCS?

oxgirl 08 Oct 2008, 4:27pm

get your money in uk accounts to be safe. nkingsbury, a transfer usually takes 3 days so money leaving account on tuesday you wont get it 'normally' for 3 days!

Mujic 08 Oct 2008, 4:28pm

Close Brothers Group plc & Kaupthing

http://www.closebrothers.co.uk/uploads/Acquisitionannouncement5AUG08.pdf

5 August 2008 - Close Brothers Group plc announced acquisition of Kaupthing Singer & Friedlander Premium Finance Ltd

KSF Premium Finance Ltd was (until that transaction) a subsidiary of KSF Ltd

oxgirl 08 Oct 2008, 4:29pm

so nobody knows if we can actually 'get' our money out??? or maybe it will just take a bit longer? ing have taken over our accounts, so its not a case of claiming from FSCS for kaupthing money?

ftsefaller 08 Oct 2008, 4:40pm

I've been trying to contact Kaupthing because I cannot remember my log-in details - I've looked my account twice since I opened it in April when I transferred many thousands in there. The phone number has been constantly engaged.
Does anyone have an alternative contact?

TinTin52 08 Oct 2008, 4:41pm

For anyone interested, initiated transfer Tuesday 10-00, account balance went to zero with tranaction ref before 16-30 but as of now no sign of it in target account. This morning target bank said it was not being held in their system. Spoke KE this am and was told chaps had definitely gone from their end. Beats me but same person at KE also told me they were completely safe and business as usual about 15 minutes before Treasury press release announcing KSF had been put into administration!

oxgirl 08 Oct 2008, 4:41pm

wouldnt bother contacting them, they dont exist! just have to wait and see what happens

kerthumperNo1 08 Oct 2008, 4:48pm

Can someone convince me why we should have any faith in ING's statement that "Your savings are protected under the Dutch Investor Compensation Scheme". Oh yeah? That'd be like the Icelandic one then?

oxgirl 08 Oct 2008, 4:48pm

dont risk your money get it out to a uk account ASAP. at least our gov are lookin out for us

FrightenedCat 08 Oct 2008, 4:53pm

I've just tried to log in to KE to transfer my savings out but can't access my account. Enter all the correct log in details but screen just freezes at the final stage. Has anyone had any communication from ING? How do we access our accounts?

oxgirl 08 Oct 2008, 4:58pm

I can stil get in ok, prob everyone is trying to get in and its a panic thing.

think ing has our accounts and it will just take a bit longer for us to get the money transferred

driver9 08 Oct 2008, 4:59pm

Info re chaps transfer / funds in cyberspace ?

I made 2 chaps transfers, one over the week-end, and one on Monday 6th - both amounts show up as being processed same day ie Monday 6th, and my KE account was debited accordingly ,but no show of funds thus far today at my linked account, and Natwest tell me that I should check later on after midnight / next day as this would be 3 complete days ?

kerthumperNo1 08 Oct 2008, 5:00pm

Of course no-one's heard from ING, Cat. Look at their website. Not even a mention of events. We're all just being pushed around like so much inconvenient baggage.

oxgirl 08 Oct 2008, 5:02pm

stop panicking! either ing has our money and it will take a bit longer to process or we have to get it back from FSA. hopefully ing has it!!

kaputski 08 Oct 2008, 5:03pm

ftsefaller - have you retained the original email from KE to confirm the setup of your account? It should appear in your inbox as having come from 'no-reply' and will contain your user ID. You'll have to remember your password and memorable word though.

I have just logged in to my account with KE to check that my withdrawl, put through after 2.00pm yesterday, was showing on my account. No problems logging in and the transaction is showing on my statement. Time will tell if it turns up in Barclays though....

Monbarks 08 Oct 2008, 5:12pm

Greetings All, I've been trying all day to log in to my KE savings account without success, I reckon they've locked out their customers in order to prevent a run. The phones are constantly engaged too.
Here we go again!

ionberkley 08 Oct 2008, 5:12pm

More information on the Isle of Man situation

http://www.iomtoday.co.im/news/Kaupthing-Singer-amp-Friedlander-Isle.4572764.jp

oxgirl 08 Oct 2008, 5:14pm

ive had no problem acessing my account today. maybe its just busy, and guys make sure your not panikcing and not putting in passwords etc wrong

Chippyboy 08 Oct 2008, 5:20pm

Just to echo other experiences here...

I logged in and "withdrew" £31,000 by CHAPS at 8 O'clock this morning and got a transaction confirmation and reference number.

But now at 5:19pm, the account still has £31,000 in it and there is no mention of the transaction anywhere to be seen. I keep checking back and expect to see the balance down to a hundred pounds or so, but its all still there.

Wierd. (And just slightly worrying.)

Mujic 08 Oct 2008, 5:20pm

I did speak with a contact at KSF earlier today (at 2.15ish, the main bank, rather than K. Edge) and there was an embargo preventing staff from speaking to clients anyway, so its not a great deal of help if you do get through.

The primary person I deal with said in an email on Monday that he would be leaving today... coincidence or planned I don't know.

oxgirl 08 Oct 2008, 5:22pm

chippyboy

transactions dont leave your account for 3 days in normal business - so your scaremongering

wasmymoney 08 Oct 2008, 5:33pm

I transferred all of my KE savings out by CHAPS (same day transfer) on Tuesday morning (9am) and my KE account has shown the money has left the account. As of 5pm on Wed this cash has not arrived in my UK current account. This is worrying . After speaking to the FSCS, they have informed me that money in the process of being transferred is not covered under the compensation scheme. Obviously I cannot talk to KE as no one is speaking to customers ( the account is still showing the money has left) and the receiving bank tell me they can't help. Where has my money gone?

All of you who have transferred money in the last couple of days check your accounts?

Chippyboy 08 Oct 2008, 5:34pm

Oxgirl: Sorry you are wrong. CHAPS transfers are supposed to happen same day.

oxgirl 08 Oct 2008, 5:36pm

sorry didnt see it was chaps. but think youve got to realise that ing have taken over a new business, prob going to be a few slower transactions, especially all of us loggin on!

oxgirl 08 Oct 2008, 5:38pm

trying to be positive. at least we can get into our accounts not like icesave. and it doe say on government page that our accounts are with ING

Messyplay 08 Oct 2008, 5:41pm

I think we're gonna be OK - ING is taking over our KE savings and, when you get round to it (sooner rather than later) just get your money out of KE and slap it into Alliance & Leicester's E-saver which is paying 6.6% so is a better rate than KE anyway!

oxgirl 08 Oct 2008, 5:45pm

cool

desperatehousewf 08 Oct 2008, 5:50pm

I am afraid Kaupthing Freilander is no longer in existance and is in receivership. The administrators are in tomorrow.

desperatehousewf 08 Oct 2008, 5:55pm

However, whether your savings are safe elswhere is anyone's guess. Kaupthing and Ing..."KING"

desperatehousewf 08 Oct 2008, 6:04pm

It is not clear if ING is protected by FSA completely. So just another icebank scenario?

Dogsolitude 08 Oct 2008, 6:15pm

Whoopsy. I put a bit of money in a KE account. I'm not sure where in the aether it is now, but I'll sure miss that lovely gunmetal/black/green website and the cool logo...

Hmmmn 08 Oct 2008, 6:15pm

For info - I've managed to login to KE everyday without a problem - remember the password is case sensitive. However I ordered a BACS withdrawl on Monday evening (6th), the money left KE account on Tuesday 8th and I'm still waiting - guess I've got until the 10th to find out....

desperatehousewf 08 Oct 2008, 6:15pm

PS Worked there until 4pm.

Bess1e 08 Oct 2008, 6:17pm

The Alliance and Leicester e-saver account has a good interest rate but you lose a month's interest if you withdraw funds in any month other than July.

d