* SKIPTON BUILDING SOCIETY: are we dealing with idiots? Or, alternatively. . ??*

codger

OK. Mrs C and I are NOT financial experts. So to others of greater experience and expertise here, apologies in advance. . .

At the beginning of last month, we learned of the imminent launch of Skipton Building Society's new Fixed Rate ISA. Details, as provided by Skipton Building Society, were as follows:

"Our Fixed Rate ISA:
* A fixed rate of 6.50% tax-free pa / 6.54% AER until December 14, 2009
* A minimum opening and operating balance of just £50
* A maximum investment of £3,600 in any tax year
* No limit to number of withdrawals or transfers although all withdrawals will incur a penalty of 90 days loss of interest
* Payments into your account can be by cash, cheque or transfer
* Transfers in from other cash ISAs are allowed."

On Wednesday, July 9th, we downloaded the application forms from the Skipton BS website. Gathered together proof of identity. Posted off the material together with two cheques for £50 to open the two accounts. And then went on holiday. As people do at this time.

We returned home last Saturday, July 26th, to find that Skipton BS had opened both these accounts with effect from Friday, July 11th.

Our existing cash ISAs, with a different provider, are online accounts. The new Skipton BS cash ISAs are not. It means going into town to the nearest branch, which to us seems positively Dickensian, but no matter: we drive over once a week. So we were in town yesterday. And I called in to the branch to discuss the procedure for transferring in our existing ISAs.

The branch office featured three tables around which sat three employees with three customers. Ranged around the walls -- literally -- were seven other customers. Queuing. Great ambience. Neat decor. But not a lot of space. You'd need to squash up behind a display board to even get in the queue.

I left. Nothing wrong with Skipton being busy. Nothing wrong with a Skipton customer having better things to do than be a wall fixture, either. Because as Skipton BS's letters to Mrs C and I make clear:

"If you have any queries, please call our Helpline on 0845 850 1722 and we will be happy to help."

So this afternoon, Friday, August 1st, I did just that. Here's the transcript:

'Hello. My name's Ruth. How can I help?'

'Hi. My wife and I have just opened two ISA accounts with you. The new Fixed Rate Cash ISA. We'd now like to arrange the transfer in of our existing cash ISAs. How do we go about that?'

'Oh, I'm sorry, sir. But you can't.'

'Come again?'

'The product was withdrawn last Tuesday.'

'Um, ah, what does that have to do with us? We just want to know what's involved in transferring in.'

'Sir. The Fixed Rate Cash ISA closed to new business on Tuesday. It's not possible to transfer in now.'

'Hang on a minute. We're existing customers. Not "new business". Are you trying to tell me, our accounts are closed?'

'No, sir. What I'm saying is, the offer, the product, was withdrawn. On Tuesday.'

'So. . ?'

'So I'm sorry, but you've left it too late to transfer in.'

** Deep Breath **

'OK. Let's start again. The stated terms of your offer included the promise that we can transfer in our existing cash ISAs. If you hadn't promised that, we wouldn't be doing business with you. So. . . how do we go about arranging those transfers?'

Sir. . . Transfers would have to have been made before the offer closed last Tuesday.'

'But our accounts are not even 28 days old! What's going on here?'

Silence


'If your Society was going to revise the T&Cs of our accounts, don't you think it should have written to us? Because it most certainly hasn't.'

'All I can tell you, sir, is that this offer, this product, was withdrawn last Tuesday. It's now too late for you to make any transfer in.'

'Well, all I can tell you is that if this is how Skipton Building Society goes about its business, perhaps I'd be better off speaking to a financial regulator. Yes?'

'I'm sorry, sir. But that's the position.'



Advice welcome. . .

real1314

Seems fair enough to me. They can withdraw an offer at any time. You're just unlucky.
And you've suffered no financial loss.

LittleVoice

I know that Skipton have been applying the decision not to allow transfers in from the time that new accounts could not be opened - because OH opened one on Monday, the last day it was possible.

However, I agree with codger and am in same position as opened an account a little earlier and would like to transfer in my other ISAs which are at a lower rate. And it is there where Mr and Mrs codger, I and others are losing out financially because Skipton have chosen to not honour the term regarding transfers in.

He is right, they have changed the terms of the account without notification. They would probably rely on a term about being able to change their terms without notice in the light of market conditions. Perhaps they decided to withdraw the transfer in option because it was too costly to live with.

From the outset they should have stated that transfers in were simply not allowed (other providers do this). If they won't allow transfers in because the product is no longer on offer, logically they should not allow any new funds in (by cash, SO, or cheque or transfer).

I am disappointed with Skipton on this.

real1314

Do skipton have to keep the transfer in option open forever?
No. They can close it at any time. The transfer in was available when you opened the account, so the terms were accurate.

You have NOT lost out financially. Where have you lost money?

You have only lost the opportunity to invest at a better return, just like people who were too late to open this account.

It's really just a case of moving on.

soulandy

well I hope they are still keeping the intrest rate intact then and not deciding to lower it now that it is no longer available.

LittleVoice

Response in blue -

real1314 wrote: »

Do skipton have to keep the transfer in option open forever?
No. They can close it at any time. The transfer in was available when you opened the account, so the terms were accurate. They gave no notice to us of changing what they were offering. If they decide to not accept any addition to the account (another of their terms) and don't give account holders any notice but simply refuse to accept funds when it is offered/sent by BACS, is that OK too?

You have NOT lost out financially. Where have you lost money? We have not lost (past tense) but will lose (in the future). Eg £10000 @ 6.01% for a year when could earn 6.5%, loss in the future of 0.49% (£49). And this could be greater if the rate on existing account falls - and I know rates could rise - or the 6.5% may be available to transfer into elsewhere too.

You have only lost the opportunity to invest at a better return, just like people who were too late to open this account. Skipton withdrew the account. Fine - a missed opportunity for others who didn't open the account. This is about changing the terms of an account which has been opened on the terms then specified (including "transfers in allowed") - and where there is a penalty if we decide to take our funds out while the FR applies.

It's really just a case of moving on. - Certainly - move on to not trusting Skipton to honour what they state.

codger

Well, Real. Not only do I not accept your argument, I can't see the slightest logic in it nor even the most tenuous legal justification.

The promises and commitments made by Skipton Building Society at the time of selling this savings product were unqualified. No asterisks. No small print. No exceptions. Nothing. Just -- and I'm quoting exactly from Skipton's own promotional text:

* Payments into your account can be by cash, cheque or transfer
* Transfers in from other cash ISAs are allowed.

But now that final promise, that final commitment, is broken. Yet your response is: nothing wrong with that. On which basis therefore, you'll presumably have no objection at all to any other promise or commitment being broken.

Because if you're willing to accept that kind of precedent, then you're bound to accept whatever devolves from that precedent.

Littlevoice has already raised this exact same issue.

Which means Littlevoice, myself, and every other similar account holder who wishes to pay monies into our accounts by cash, cheque or transfer now in theory face the possibility of being told by Skipton Building Society: 'Sorry. You're too late. We withdrew this product on Tuesday July 29th. You can't pay anything in at all.'

The Skipton Building Society 6.50% Fixed Rate Cash ISA is -- according to Skipton itself -- a savings product.

As a product, therefore, it was marketed. (No argument there, I have all the advertising material and promotional blurb in front of me: Skipton BS, as a producer, extolled the product's virtues in much the same way that a producer of motor vehicles extolls the virtues of its latest car.)

And the purpose of that marketing? Obviously, to attract new customers. To enable Skipton BS to profit from new business which might otherwise have gone to a rival.

And so, on the basis of promises freely extended in the marketing of a product aimed at securing business from new customers who might otherwise have financially advantaged a commercial rival, the 6.50% Skipton BS Cash ISA was successfully sold.

No different than a new car.

Except: unlike the new road vehicle acquired for usage according to expectations explicitly fostered by its manufacturer,the new savings and investment vehicle has suddenly become unusable according to the expectations explicitly fostered by the Skipton Building Society.

Because it has been crippled almost from the get-go.

Two wheels have almost immediately fallen off and will notbe put back on because -- on the basis of your logic -- the seller of the vehicle can legitimately claim that as it has been withdrawn from production, not only are all the people who may have wished to acquire it now no longer able to do so, all those people who did acquire it will just have to accept that it's not at all what it was promised to be.

Forgive me for asking, but don't you feel that's sublime nonsense?

As to your dismissiveness of the issue of financial loss, we have already incurred wholly unnecessary costs in time, travel, and postage, and will continue to lose money as a result of being sold an investment vehicle which is (a) not fit for purpose and (b) not as described.

Littlevoice's surmise is, to me, entirely correct.

Skipton pulled this product the instant the targeted level of funding in-flow was attained and before incurring too great a risk of winding up with too much exposure to investor interest pay-outs.

Having pulled the product, Skipton then retrospectively sought to minimise the continuing exposure to risk which Skipton itself had allowed to arise through its unambiguous promise of transfers-in of cash ISAs from other providers.

It withdrew the offer, cancelled the product, and changed a fundamental aspect of both within less than 21 days. It did so without notice and in blatant disregard of ethical best practice.

Thanks for your input then, Real, but I don't accept a word of it.

And I'm quite unable to reconcile your concluding phrase:

"It's really just a case of moving on"

with an argument that in every other respect advocates no movement at all: just sit there, supine and acquiescent, and let this particular financial institution glibly re-write its promises and commitments as and when it chooses.

Not a chance.

LittleVoice

It's a mutual organisation. Skipton's AGM was in April. If they don't recant over this issue, I hope it will be raised at the 2009 AGM.

codger

LittleVoice wrote: »

It's a mutual organisation. Skipton's AGM was in April. If they don't recant over this issue, I hope it will be raised at the 2009 AGM.

Good point. But I'm thinking this issue merits more than re-canting.

Here's an excerpt from the leaflet The Banking Code and You which Skipton included in its correspondence to us at the time of account opening:

We subscribe to the Banking Code. Not all financial institutions do. Doing your banking with someone who subscribes to the Banking Code gives you extra confidence. . . The Banking Code sets minimum standards of good service that you can expect. . . This leaflet tells you about our key commitments and responsibilities to you under the Banking Code.

Our key commitments to you

We promise we will treat you fairly and reasonably when providing you with products and services covered in this code. We will keep this promise by meeting all of the key commitments shown below:

* We will make sure that our advertising and promotional literature is clear and not misleading and that you are given clear information about our products and services

(NB: that's rated as Commitment Number 1).

Here's Commitment Number 3:

* We will help you use your account or service by sending you regular statements (where appropriate) and we will keep you informed about changes to the interest rates, charges, or terms and conditions.


'Nuf said, really. Skipton is in wholesale breach. Its advertising misled; the information provided was not clear because it obscured the fact that withdrawal of the transfer-in facility could occur at any time; Skipton failed to inform of a change to its terms and conditions.

I'm penning a letter to Skipton now, though I greatly resent the waste of time involved in needing to address an issue that should never have arisen in the first place.

:mad:

Milarky

Although it may have said in the bullet points quoted above that you can make further additions, they could have qualified that in the more detailed terms and conditions. Something like: "...as long as the issue remains open" is standard wording for this. If Skipton did enter such a caveat in the T&Cs I'd say the OP has to accept that. But if they didn't spell it out then the benefit of the doubt must go with the customer. Where an error (in the literature) occurs - because they 'intended' one thing but misled their customers unintentionally - then you'd expect the organisation in question to do a general remedial action by writing to all customers who have opened the account and say something like: "This issue has now been closed, and new accounts can no longer be opened. However, as an existing customer, we are prepared to accept instructions from you for transfers into the closed issue - on the original terms - provided we receive such an instruction no later than [1 Sept 2008?]"

From my dealings with Skipton, they are friendly and try to be helpful, but they are a tad officious too - a bit like a bigger Society.

Good luck, the issues should be pretty straightforward to resolve one way or the other.

Milarky

Just found this:

Google: inurl:http://www.skipton.co.uk/savings_and_investments/isas/fixed_rate_cash_isa/
Select cache as the current page no longer exists (and the cached page won't last forever either)

The purpose of this Key Features Document is to provide a balanced summary of our products so that you can make an informed and confident choice about how to save.

Our Fixed Rate ISA – product details

If you like the idea of being able to save tax-free and you want the reassurance of a fixed rate of interest, our Fixed Rate ISA is well worth a second look. We have made this addition to our range of Skipton Cash ISAs for a limited period – so act quickly so you don’t miss out.

• A fixed rate of 6.50% tax-free pa / 6.54% AER until 14 December 2009
• A minimum opening and operating balance of just £50
• A maximum investment of £3,600 in any tax year
• No limit to the number of withdrawals or transfers you can make (minimum £1) although all withdrawals will incur a penalty of 90 days loss of interest. (subject to a minimum operating balance of £50)
• Payments into your account can be by cash, cheque or transfer
• Transfers in from other cash ISAs are allowed

and from the same page

How do I transfer my Skipton Fixed Rate ISA to another provider? If you ever wish to transfer your Skipton Cash ISA to another provider, simply advise us in writing."

and again, just below that

Something to remember...
At Skipton, we continually monitor the market to make sure we offer great rates of interest. However things can change quickly – and sometimes we have to stop offering products sooner than we expected. That’s why we recommend that if you’re interested in a particular product, you act as soon as you can.

Now look for further specifics in the 'Terms and conditions' for this account

Google:inurl:http://www.skipton.co.uk/savings_and_investments/isas/fixed_rate_cash_isa/
Select cache

Further terms and conditions for the Fixed Rate Cash ISA

1. A Skipton Fixed Rate Cash ISA may only be opened by an individual aged 16 or over who is resident or ordinarily resident in the UK for tax purposes or, if not so resident, performs duties which by virtue of Section 132 (4) (a) of the Income and Corporation Taxes Act 1988 (Crown Employees serving overseas) are treated as performed in the UK, or is married to a person who performs such duties.
2. The account must not be a joint account or held on behalf of a person other than the account holder.
3. In accordance with ISA regulations, investments in any tax year are limited to the amount permitted by HM Revenue and Customs (currently £3,600 in a cash ISA) regardless of the level of withdrawals made.
4. The account holder must not subscribe to more than one cash ISA in any one tax year.
5. The maximum overall subscription per tax year is £7,200. Up to £3,600 can be invested in a cash ISA. Up to £7,200 can be invested in a stocks and shares ISA. The account holder can decide for themselves the balance of their investments provided they keep within the £3,600 cash limit and the £7,200 overall limit.
6. The application form including Declaration and Authorities must be completed and signed by the applicant.
7. You will have 14 days from receipt of your ISA acknowledgement letter in which to change your mind and request cancellation of your investment in writing only. Your cancelled ISA will not count as an ISA subscription. Interest will be paid gross duringthe cancellation period.
8. The commencement date of the Skipton Cash ISA will be the date of the first entry in your passbook.
9. In the event of death, gross interest up to the date of death will be paid into the account. The account will become an access account from the date of death with tax deducted at the appropriate rate. In this event we will advise of the new terms of the account and any alternatives available at the time.
10. The account will be operated in accordance with prevailing rules and regulations and legislation which may, of course, be varied from time to time, by the Government.
11. In the event of you breaching the rules, regulations or legislation for a Skipton Cash ISA, or any of the terms and conditions of this Skipton Cash ISA, the Society will immediately transfer the account to an access account backdated to when the account was opened and deduct tax at the appropriate rate. You will be advised of the rates and terms of the access account applicable at the time of transfer. The account will be debited to recover any tax payable on the gross interest that has already been credited and this may involve withdrawals from interest that has been capitalised. The Society will also transfer the account in this way if the account holder becomes bankrupt.
12. Payments in may be by cash, cheque or transfer.
13. Withdrawal transactions require no notice and must be made by cheque or transfer. On receiving instructions to close your account, all funds, together with interest earned will be transferred or paid to you within the time stipulated by you or, at the latest, within 30 days of receiving your request.
14. If you wish to transfer your Skipton Cash ISA to another ISA manager, we will transfer the account within the time stipulated by you or, at the latest, within 30 days of receiving your request.
15. All transfers and withdrawals are subject to a 90 day interest penalty on the amount withdrawn/transferred.
16. All transfers to and from other Skipton accounts (where applicable) are subject to the terms and conditions of those other accounts.
17. The Skipton Fixed Rate Cash ISA is a share account which confers membership rights and is subject to the Rules of the Society. Copies of the Rules can be obtained from any branch or from our Principal Office.

there is nothing there to qualify what Skipton has done - it's just all general ISA stuff

Since the 'product details' state transfers in are allowed, but nowhere is this qualified in the 'terms and conditions', this information is misleading in my view. The terms and conditions simply don't address this question of transfers-in and they ought to.

[I'd say the OP has a valid complaint as you can't discern Skipton's intentions by relying only on what they have produced at the time of launch - the 'Key Features' or the 'Terms and Conditions'. There is a banner saying 'limited offer', granted. They say that the account itself my have to be withdrawn - as it is for a limited period. Fair enough, but in what ways 'limited'?