‘You just feel like crying’: Retired civil servant lost over £270,000 because of one simple mistake

There are few things more upsetting than discovering that a firm holding your money has gone bust.

But for Trish Paling, a retired civil servant, that’s exactly what has happened. She has lost more than £270,000 of her and her husband’s life savings after Algarve-based Premier FX collapsed this summer.

She and her husband were retired and had planned to move to Portugal for a comfortable life in the sun. But the demise of Premier FX means that dream may never happen.

They had paid their money to the company so that it would gradually exchange them into euros, ready for their new life.

The FCA approved company specialised in helping expats and would-be expats move their money into euros, either because they lived overseas or were planning to move abroad. Because it was FCA approved, the couple believed they would have FSCS protection for their money – but they didn’t.

“We went to Portugal in March and found a house we loved,” Trish told The Independent. “In April we started to transfer money from our account to Premier FX’s.”

“We then made an offer on our house, which was accepted. Under Portuguese law you pay a deposit and at that point it becomes legally binding and they take the house off the market. We paid €22,000 from our Premier FX account.

“The property sale was going through absolutely fine. We had no indication there were problems. We were still transferring money in early July.

“On 27 July, my husband got an email from Premier FX saying they had ceased trading. We had no idea what was happening, no way to communicate with them. It was horrendous.”

She says they have lost more than £270,000, which was their life savings. She is waiting to hear if the administrators will be able to return any of the money she and her husband had saved, but for now it’s a horrible wait.

“There are days where I just can’t get out of bed. You just feel like crying,” she admits.

The couple believed their money was protected by the Financial Services Compensation Scheme (FSCS). However, although many FCA approved financial firms and products are protected by FSCS it can’t be assumed that they are without checking. In this case, the financial product that was used was not protected.

This recent example highlights the importance of checking that your money is protected before paying it into a firm.

It’s vital to understand that not only should you check that the financial company is FCA authorised, you also need to check that they (and the services you are using with them) are FSCS protected.

Had Trish’s cash been held as a deposit within a company that had FCA authorisation to do so, it may have qualified for FSCS protection. That means they would potentially have been able to claim up to £170,000 of their cash back thanks to that FSCS protection – £85,000 per person.

But it wasn’t, leaving them unable to claim even part of their money back that way.

“FSCS protection only applies to certain types of regulated activity,” a statement on FSCS’s website explained. “Money remittance – the only activity which Premier FX Limited is authorised to undertake – is not one of those types. This means FSCS will be unable to compensate for any shortfalls in customers’ money held by Premier FX Limited, however deserving those customer cases may be.”

It’s a horrible story and one that highlights the importance of doing more than simply checking that a financial company is FCA registered before paying money to it. It’s also vital to check the firm is authorised specifically for the services it is offering and to check that those services are covered by FSCS.