Couple lose life savings of £272,000 they invested with financial firm despite it being regulated and FCA-authorised

The couple researched their move to Portugal meticulously but did not realise their new account had no protection at all

The FCA does not provide compensation for accounts with firms that are only licensed to hold remittance money (Rex)

“I’m not suicidal but there are days where I feel I’m in a black hole. My dream has been ripped away from me. I really don’t know what I am going to do.”

Trish Paling is eloquent on the subject of her misfortune. Since her retirement dreams ended earlier this year, she has been making her case to everyone from her MP to the police.

She and her husband Bryn reached their fifties a few years ago and, as civil servants with no children, decided to take early retirement and move to Portugal. They did not take risks with their money; they did everything right. And yet they may have lost their life’s savings – £272,000 that was to launch their new life in the sun.

The couple researched their move meticulously, attending exhibitions and working hard to understand the financial requirements of such a big step.

Trish and her husband decided to use Premier FX, a foreign exchange firm that helped Britons buy homes abroad. It was the sponsor at one of the exhibitions they attended and they were impressed by the competence and professionalism of the staff. They checked it was regulated by the Financial Conduct Authority (FCA) – believing this meant their money would be protected by the Financial Services Compensation Scheme (FSCS).

The scheme is the last-resort guarantee for British savers, paying out compensation if their account providers go bust. It also provides a route to compensation for mis-selling or poor advice. If a financial services firm defaults then their customers can apply for compensation from the scheme instead.

Trish Paling with her husband Bryn (Trish Paling)

Premier FX suggested Trish dripfeed her money into her account with them, meaning a lower risk of a poor exchange rate to euros than with transferring everything on one day.

What she did not know is that the company was not authorised to hold her money, it was only authorised as a money remittance service. The couple’s life savings, which included an inheritance, had no protection at all.

Unaware, they continued to plan their new life. “We went to Portugal in March and found a house we loved,” continues Trish. “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.”

It swiftly became more horrendous. The FCA applied for Premier FX to be put into administration as it was unable to pay its debts. It said it was very concerned that criminal activity had taken place. Both Portuguese and British police began looking into the firm’s business practices.

But for the Palings and the other affected customers, there was just the devastating realisation that the FSCS would not be riding to their rescue.

The scheme put out a sympathetic but blunt statement: “FSCS protection only applies to certain types of regulated activity. 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.”

Their dream was destroyed. The house was put back on the market. Their financial security was dealt a massive blow. “I’ve experienced quite serious depression,” admits Trish. “There are days where I just can’t get out of bed. You just feel like crying. Some of the other creditors are in desperate straits. Some are, frankly, suicidal.

“But my husband and I won’t take this lying down.”

The Palings’ story is extremely sad but also extremely cautionary. Very often the advice is to check a financial firm is FCA registered – but their experience shows this is not enough.

A spokesperson for the FSCS told The Independent it recommended customers check FCA’s financial services register for a firm’s authorised status as well as which regulated activities the firm has permission to conduct.

The spokesperson added: “Customers can contact us to enquire about protection in relation to a firm, though we cannot guarantee in advance that a customer will receive compensation if the firm fails. Due to the complexity of financial services products and regulation, FSCS recommends that customers obtain professional advice before depositing or investing significant sums of money.”

For Trish, that advice comes too late. Instead of their first Christmas in Portugal, the couple are in financial limbo, waiting for administrators to put Premier FX into liquidation so they can see how much, if any, of their money will be returned to them.

Her voice falters slightly as she describes how this experience has changed her. “You think you’re protected and I’ve learned you really, really are not. I have lost all trust in the regulatory bodies, I feel like my money is only safe under my mattress.”