DCS - 50,000 pounds

  • GaryGoo
  • 10/10/08 31/05/09
  • unspecified
  • Offline
Posted: Sun, 21/06/2009 - 06:05

Like Klaus we are group 2 depositers able to claim up to 50,000 each from the DCS and we received the paperwork last week. As there is so much information flying around now, could someone kindly confirm that if we decide to go forward and claim this amount back (deadline apparently by June 30th) this does NOT mean that we will no longer be entitled to getting our deposit back in FULL? Thanks again to all you keep this site running and giving us hope.

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@GaryGoo

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
  • Offline
  • Sun, 21/06/2009 - 08:13

As I've posted elsewhere, my wife and I are in this position. The IoMT were last expecting a return of 75% from liquidation (their plan under the SoA was to start their recovery of funds at 70%). Now, if you are a joint account holder with £100,000 you would be entitled to £50K compensation and so would your joint account partner. If you then assign your total deposit of £100K to the Scheme Manager, he gives you the £50K each as and when he sees fit to do so. The Scheme takes a hit of £25K if the proceeds from liquidation amount to only 75%; this shows the benefit of being a protected depositor.

If you have £200,000 on joint deposit and the assets realise 75%, then you could expect to eventually (5-6 years?) receive back £150K. If you assigned all of your deposit to the Scheme Manager then he would oblige you with £50K each (when he sees fit) and, eventually in turn, receive back from the liquidator this £100K when recoveries total 50%. After that, all further dividends from the liquidator 'should' be returned to you and your joint partner, but there is a clause in the DCS agreement which states that the Scheme Manager may compromise this claim. That element of the DCS has not yet been clarified to my knowledge. If on the other hand, you choose not to pursue the DCS, then, with the first dividend paid by the liquidator at 14.5%, you would receive £28,000 between you; with the next dividend expected to be around 10%, so you would get another £20,000 between you. This would continue until you received £150K -- providing total returns reached 75%. Obviously the payout is slower under liquidation in this example, but on the other hand, your claim isn't compromised.

You can see that with £400,000 on deposit the numbers above are doubled, so that the first dividend would bring in £56K and the second £40K. (if we continue the assumption of 14.5% and 10% respectively). With this amount on deposit, the first two dividends will take you to almost parity with the DCS payment (for a couple) the only consideration then would be timing.

It does seem that joint account holders get a reasonable deal from the DCS deal depending upon the size of deposit. You will need to interpolate/extrapolate for the size of your own deposit and number of joint holders.

Your question 'will assigning your rights to the Scheme Manager compromise the return of 100%' is interesting. To get the £50K compensation, depositors are obliged to assign ALL of their deposit to the Scheme Manager. This is the requirement, and you get the rights reassigned/monies redirected only if and when the Scheme Manager gets his £50K back (if realisations permit this). This could be some years away, so do you have the right to pursue the full return of an asset that you have legally assigned to another party? This I leave open for someone qualified to answer for I cannot say what the legal position is.

This is my own interpretation of how I think it works based on what we know so far, and others may wish to correct this.


DCS - 50,000 pounds

  • GaryGoo
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Mon, 22/06/2009 - 10:04

Ice crusher,

Many thanks for your response to my question, it is very helpful. There were a few more comments from other members and as there are still many "shoulds" and "maybe's" I guess my wife and I will have to arrive at some decision this week as I believe the deadline is end of this month to apply on line.

Thank you again.


DCS

  • benchar
  • 10/10/08 31/08/09
  • a depositor
  • Offline
  • Sun, 21/06/2009 - 22:42

What has been totally overlooked is that IOMG DCS is NOT a Compensation Scheme
it is actually a loan scheme.As the amount paid out under the said scheme is deducted from payments from the reciever ,the fact is that IOMG actually contribute NOTHING in terms of any real compensation.
I am advised that under the UK DCS if you had £100,000 deposited ,the UK scheme pays £50,000 then if asset realisation was 75% you in fact then get 75% of the £50,000 balance =£35,000. So the UK DCS would return £85,000 of the original deposit of £100,000.( £50,000+£35,000 )
But as the IOMG reclaim their original payment from asset realisation you only get 75% of the original deposit = £75,000 -------------THATS £10,000 LESS.
We have all been decieved this is NOT a compensation scheme BUT SIMPLY a loan, which IOMG simply claw back as soon as possible.
Thats why replies from UK politicians always make a point about the DCS payment,but are totally unaware that IOMG scheme is different from UK scheme and in fact is not compensation but a loan scheme,and a poor one at that.


Let's get things into perspective

  • Mugged by HMG
  • 08/11/08 31/05/09
  • a depositor
  • Offline
  • Mon, 22/06/2009 - 06:54

Let's get things into perspective. Whatever the DCS is it's better than what most of us signed up to: i.e. 75% of the first £15k. In the case of depositors with accounts below the £50k threshold there will be some cost to the IoM Treasury in the event of a sub 100% recovery, bu not as much as it might have been. Had the bank been in a worse state, this would have been considerably higher and with the new DCS coming in immediately on KSF going into provisional liquidation, they would not then have been aware of how much it was going to cost them.

In the end our lot is considerably better than that of depositors in the Channel Islands and for that I am extremely grateful.


FSCS v DSC

  • mikeinfrance
  • 12/10/08 28/09/09
  • a depositor
  • Offline
  • Mon, 22/06/2009 - 01:05

The UK FSCS did guarantee £50K but in fact UK depositors received 100% of their deposits back. The IOM DCS guarantees that all depositors will receive at least £50K, or 100% for those with £50K or less deposited. Obviously the DCS could only recover all that it pays out to those depositors with £50K or less if the recovery from the liquidation is 100%. The DCS stands in each depositors shoes and recovers at the same rate as the depositor would have done had they not claimed through the DCS.