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Icelandic bank customers to receive payout

The Financial Services Compensation Scheme (FSCS) today confirmed it would be paying out to 180,000 customers of two Icelandic banks.

The scheme said it would pay out the first £50,000 that people had lost through Heritable Bank and Kaupthing Singer & Friedlander, whose operations include Kaupthing Edge, with the Treasury topping up the rest to ensure that no consumer lost money.

The announcement comes the day after the Financial Services Authority (FSA) said the two groups had gone into default, and the Treasury announced that the bulk of their savings businesses were being transferred to Dutch savings bank ING Direct UK.

The FSCS said today that compensation for the people whose savings had been transferred to ING Direct would be paid directly to the group.

But it said around 3,000 savers who did not have internet accounts with Kaupthing would be paid directly by it, as would around 100 depositors at Heritable Bank whose accounts were also not transferred.