A COUPLE stand to lose their home after investing in a Derbyshire Building Society subsidiary which was sold to a now-failed Icelandic bank.

Susan and Brian Soar poured their £200,000 life savings into Isle of Man-based Derbyshire Offshore for better interest rates.

But the couple's cash has been halved after the firm was sold to Iceland-based Kaupthing Isle of Man which collapsed in October, leaving their account in limbo.

They are now in £100,000 of debt, owing money to the taxman after selling their business and a building company, with no way to pay up.

Mrs Soar said: "We don't know what to do. We've put our house on the market. Our son has offered us money but obviously we don't want to accept that. All this worry is making us ill. We cannot sleep."

The Soars say they were not told that their account had been moved to Kaupthing Isle of Man, a subsidiary of the Icelandic bank Kaupthing Singer and Friedlander, until February this year.

This was despite buying their one-year bond three days after Derbyshire Offshore's sale was announced on November 20 last year. It was made official in December.

Derbyshire Building Society said it made a widely reported public announcement of the transfer and was under no legal obligation to inform offshore customers of the change.

Mrs Soar said: "We put our money in Derbyshire because it's a strong local brand name, only to be stripped of the cash. We had no reason to be worried when we got the letter."

She and her husband will receive £50,000 each under the guarantee of the Isle of Man's Financial Supervision Commission.

This is a loss of £100,000 plus £14,000 interest as the Soars' bonds were due to mature on November 30 this year.

Mrs Soar said: "We don't know how long it will take for this to be sorted.

"We sold our business and now need the money to pay for the £70,000-plus we owe in tax from the sale and £30,000 we owe companies who have recently done work on our house. The rest of the money would have been used to live off."

The couple, of Yorkshire, said they first decided to invest in Derbyshire Offshore after phone conversations on November 16 with the company's staff.

They claim they had several more conversations with the staff before transferring their cash on November 23 but claim nobody mentioned their money would be go to another bank.

Mrs Soar said: "We were not given any information on how to remove the money.

"We put our money in Derbyshire Offshore Isle of Man to get a slightly better interest rate."

Derbyshire Building Society would not comment on the Soars' case as it did not keep records of former customers.

However, the couple did write a letter of complaint to the building society's chief executive, Graham Picken.

In a reply, Mr Picken said: "Both The Derbyshire and KSF made public announcements about the proposed transaction and the sale was approved by the relevant regulatory authorities in both Iceland and the Isle of Man. Whilst Derbyshire Offshore took steps to notify its customers of the changes taking place, it was not required under its standard terms and conditions to obtain the consent of individual investors. It is regrettable, if as you state, that you did not become aware of the change in ownership until 20 February 2008, when you were contacted by KSF."

Mrs Soar said she was not satisfied with the response and had taken her case to Prime Minister Gordon Brown, Chancellor Alastair Darling, South Derbyshire MP Mark Todd and Wakefield MP Mary Creagh.

She said: "We went with the Derbyshire knowing its motto is 'Local Matters'. It does not appear to be that now.

"The chief executive's reply boils down to 'It's not our problem'."

Mr Todd has taken up the case of Derbyshire Offshore's account holders in Parliament and said Derbyshire Building Society's actions may have been "questionable".

He is also investigating if the customers were properly informed and told how to remove their money.

Mr Todd submitted two written questions to Chancellor Alastair Darling in an effort to discover if the Financial Services Authority, which regulates British financial services, also had concerns.

He said: "I think there is a moral wrong here but it's difficult to say who's done it at the moment."

He added that several other Derbyshire Offshore investors had contacted him, including one in Alvaston and another in Hong Kong who had objected to the transfer.

No-one from Kaupthing Isle of Man was available for comment.

Has the Icelandic collapse affected you? Call Chris Mallett on Derby 291111 ext 6023.