A & L - compensation advice re: ISA not credited

FiscalFanny

I’d appreciate anyone’s advice here please on compensation for an error A&L have admitted to. (Hope this is on right board)

Alliance & Leicester basically cocked up my ISA for 07/08 monumentally with their incompetence and system errors. Consequently I have a big fat £0 in there instead of £3,000. They tell me know it cannot be backdated.

In a nutshell I experienced:

20 minutes on hold on premium rate numbers
Inexperienced call centre operatives who countless times gave incorrect information
One operative put the phone down on me
Was promised call back 4 times – they never happened
No one would own my problem
No call history seemed to be kept and had to keep reiterating details of problem
The time it took to get this sorted spanned February to July!

They have taken over 3 months to reply to my letter of complaint. Yes, they apologise for their shoddy service but not once do they attempt to explain the incompetence of their staff but say sorry a few times and offer a measly recompense.

They offer £150 for loss of interest (they say they deem it fair and reasonable to attribute 5 years loss of interest) plus a further £50 for the inconvenience.

How do they get this amount?

My ISA would have got £3,000 x 6% = £180 per annum x 5 years = £900

Even if they are assuming the difference between a tax free ISA and tax paying savings account (where it had been languishing awaiting sorting out as I couldn’t open another ISA) with a difference of 2% then that would be

£3,000 x 2% = £60 x 5 years = £300

Are they taking the mick? Does anyone have experience of this with any providers.

I am after consumer revenge and determined to get a fair compensation as I would have left that money there for at least 10 years.

Thank guys, Fanny

Ian_W

Hi Fanny,
I think A&L are basing the 5yrs on a previous FOS decision, see case 60/09 at the very bottom of THIS PAGE. Not good news re the time you say you would have held it but it at least explains that part of their working out and possibly how the Ombudsman would view a complaint that it should be for longer.
Provided they've paid you 6% taxed for the period your money was in limbo then you've effectively lost 1.2% of that in tax so my reckoning is :
£3000 x 1.2% = £36 x 5 years = £180.
If you're a HR rate taxpayer then your loss would be double that but they may want proof of that.
You'll note that the FOS made no award for inconvenience in that particular case. The idea of compensation is to put you back to the financial position you would have been in had no error occurred but at this stage it's still very much open to negotiation and on your side is the fact that A&L will have to pay a £3/400 fee if you take it to the FOS .
HTH.

YorkshireBoy

I experienced a lengthy delay in transferring a previous years ISA to A&L recently.

My 'financial' loss was minimal (say around £50, and made up of interest rate differential), but the incompetence demonstrated by A&L throughout the transfer process was what riled me.

I made an official complaint and settled for their first offer of a £325 goodwill gesture (didn't want to be greedy ).

Had I referred the complaint to the FOS, and assuming A&L had had 3 previous complaints referred in the last year, A&L would have been charged a £450 'case fee' - a point I let them know I was aware of during our discussions.

On your specific case, I thought HMRC allowed ISA managers to correct 'mistakes' THEY had made? Not sure if this extends to previous years though...maybe someone else can provide more details?

MarkyMarkD

They are allowed to correct mistakes, caused by the financial institution, related to closure and withdrawal of funds.

I'm not sure that they are allowed to correct mistakes relating to opening of accounts or fund transfers into them.

FiscalFanny

Thank guys - great advice. Yorkshire Boy you got a good 1st offer based on an actual small loss very interestingly, maybe that threat of the FOS fee helped!

So should I reject the claim (I'm not greedy, but out of priniciple in support of customer service people everywhere I want to make them pay), write back again stating I am aware of the FOS fee, tell them higher rate tax does apply (we can prove this and tha fact that the money stayed in an account paying 5.05% gross (as I kept hoping it would be sorted and didn't want the hassle of setting up a better paying taxed savings account as an interim) and see what they offer 2nd time?

It seems the threat of the FOS may be better than going direct to the FOS reading their stance on the future of ISA's and no offers for inconvenience.

What dy'all think?

Fannny x

YorkshireBoy

What were the circumstances surrounding the original 'problem'.

Apologies if I've missed it, but did you simply send them a cheque and they didn't apply it to your account in time for the end of the 07/08 tax year?

FiscalFanny

Hi YB

Damn just typed a long reply and lost it!

I'll keep it brief - the letter I sent to A&L was 3 pages A4 detailing every call, date, time, person's name and conversation. I tried between mid Feb and mid March to credit both our ISA's for £2k each via the DD system from the A&L website. Was told take 3-4 days, after 7 days still not actioned so did Bill Payment frem my bank. Then 4 payments were taken out at same time (2 original ones actioned after 9 days and 2 bill payments from my bank) hence one of the three bounced as not enough funds. My husband's ISA credited OK, mine not.

Queried as to why hadn't gone though despite having enough funds to fund 3 of the payments, was told to wait until it was cleared then try again. Given wrong info by 5 members of staff over the periods I rang from early March to mid April even with two of them guaranteeing if it was not filled up due to their error they guaranteed it could be put right after 5 April.

Tried again, payment returned as ISA showing as already credited to £2k and this would take it over the limit.

Basically 3 times tried to pay in to my ISA and each one returned as their system didn't record it was an original error and had not been cleared so still showed as a deposit and withdrawal which it clearly wasn't.

Hope it makes sense, I'm tired and still get confused about it all!

Fanny x

YorkshireBoy

I wonder how much damage you inflicted here yourself?

Firstly, and assuming these were new ISA's (were they?), they will have wanted x days to set up the DDI with your bank. Was the DDI registered with your bank when you made your first DD pull? Actually, it looks like it was (see my second point below).

Secondly, the A&L site (Direct ISA user guide) says to allow 8 working days for your first DD to be actioned (http://www.alliance-leicester.co.uk/customer-service/user-guides/savings/direct-isa/page3.aspx). You only gave them 7 days, so maybe you were a bit hasty in sending a pair of BACS transfers?

I suspect, therefore, that the 'goodwill' offered reflects the poor information/communication you've received/been given, and not any financial loss you have suffered...unless there *was* time to correct everything before 5th April?

I apologise if I've misinterpreted your post, but if you go to the FOS and A&L raise one or both of my points above, then the FOS may side with A&L.

Good luck anyway though.

FiscalFanny

YorkshireBoy wrote: »

I wonder how much damage you inflicted here yourself?

My only error was to believe a member of their call centre. They still had 2 months to put it right.

Firstly, and assuming these were new ISA's (were they?), they will have wanted x days to set up the DDI with your bank. Was the DDI registered with your bank when you made your first DD pull? Actually, it looks like it was (see my second point below).

Yes they were set up with plenty of time (mid Feb to 5 April) and checked with both my bank and A&L

Secondly, the A&L site (Direct ISA user guide) says to allow 8 working days for your first DD to be actioned (http://www.alliance-leicester.co.uk/customer-service/user-guides/savings/direct-isa/page3.aspx). You only gave them 7 days, so maybe you were a bit hasty in sending a pair of BACS transfers?

The call centre told me 3-4 days.

I suspect, therefore, that the 'goodwill' offered reflects the poor information/communication you've received/been given, and not any financial loss you have suffered...unless there *was* time to correct everything before 5th April?

This was mid February and they still couldn't put it right and clear their systems by 5 April. The financial loss suffered is no money in my ISA for potentially 5 years +. Plus the call costs x 5. Plus the lost interest whilst sorting it out.

I apologise if I've misinterpreted your post, but if you go to the FOS and A&L raise one or both of my points above, then the FOS may side with A&L.

You do seem to have rather a harsh view.

Good luck anyway though.

Thank you, Fanny

YorkshireBoy

FiscalFanny wrote: »

You do seem to have rather a harsh view.

It's not meant to be harsh, just realistic. Surely you didn't just want to solicit replies saying "nasty banks...you're right...they're wrong...go and sue them!"

My "view" is that you've been disadvantaged by A&L's failures.

My additional "view" is that A&L may raise my second point (namely you didn't wait for the DD to be actioned) in any discussions with the FOS...if it gets that far. I thought you'd want to know that so you can prepare?

I'm not sure the word of a CSA overides the written T&C's/user guide?

That said, they *should* have been able to rectify the situation long before 5th April, and on that I agree with you.

Have you spoken to HMRC yet regarding the point I raised in post #3?

FiscalFanny

YorkshireBoy wrote: »

It's not meant to be harsh, just realistic. Surely you didn't just want to solicit replies saying "nasty banks...you're right...they're wrong...go and sue them!"

Many would say that is a derogatory comment. I shall just take it that you often get dizzy up there on your 9,000 post podium.

My "view" is that you've been disadvantaged by A&L's failures.
Yes most definitely
My additional "view" is that A&L may raise my second point (namely you didn't wait for the DD to be actioned) in any discussions with the FOS...if it gets that far. I thought you'd want to know that so you can prepare?

I'm not sure the word of a CSA overides the written T&C's/user guide?

That said, they *should* have been able to rectify the situation long before 5th April, and on that I agree with you.

And this is the point I am moving forward on, they had time to rectify and must take responsibility of their CSA'a who give out correct information (amongst other mis-information given I told that they could backdate payments after 5 April by 3 members of staff)

Have you spoken to HMRC yet regarding the point I raised in post #3?

Yes, they say unless the money was actually credited to the ISA before 5 April then no can do.

A&L know damn well they have customer service inefficiencies as in their reply they didn't even bite on the initital DD problem that could have been my hurriedness as the catalogue of errors in the light of it are monumental. However in my defence the paper information given did not say 8 days, it purely said 3-4 which is for subsequent DD's. I see with Ian's link it is tucked away on the website but I use the paper and phone versions as in the past I have found they are usually most reliable.

I shall now draft a reply to them, not accepting the first offer, lay out some interest workings out over 5 years, being realistic I hasten to add and add in the mention of the FOS fee and see what they say.

Thank you for your comments though, they are appreciated.

Fanny