Kaupthing Edge CHAPS Transfer

bigg

Chippy99 wrote: »

In "normal" times, I would be very relaxed as a result of that statement. However, god knows what shape ING will be in by (say) Wednesday. Banks are wobbling left right and centre and every day brings more woes.

I won't be completely relaxed until I have my money in a major UK bank. Fingers crossed it will show up Monday.

Here, here

johnhigg

This forum is a fantastic source of info as we're getting precious little from KE, IceSave, etc, thanks!

Add me to the list of 'in limbo transfers'. I BACS transfered 12K on Tues 7th, before I was aware of the seriousness of the problem, I would probably have used CHAPS if I'd known. Money immediately deducted from balance but yet to turn up in linked account.

I was starting to panic, but having read this thread I'm feeling a little happier that it's probably just taking longer than usual due to volume of transfers.

codger

goodethernet wrote: »

The more I read about the CHAPS system as a whole, the more I am tending to believe that there is a genuine backlog. OK so there are 10s to 100s of people on here (including me) who have CHAPS payments from KE in limbo but KE has one hundred and sixty THOUSAND customers, a big proportion of whom tried to take money out 5/6/7/8 October as Icelandic banks got deeper into trouble.

Just to clarify:

1) There was no back-log in the CHAPS / BACS system. That particular hare was set running by a KE (UK) customer support employee desperately flailing around to explain why KE transfers had apparently disappeared into the ether.

2) Although thousands of account withdrawals showed up on users' individual online account pages as "transfer complete", no such completion occurred because no monies were ever transferred.

3) The collapse of the Landbanski operation effectively killed Kaupthing Edge. KE was, by comparison, well founded, well run and, in the UK, a model of how an online savings provider should operate.

4) Landbanski's demise triggered a run on KE and KE saw that run growing wider and faster by the hour. It did not, therefore, initiate any CHAPS or BACS transfers but, as it was legally obliged so to do, notified the FSA of its increasingly fragile, default-approach situation.

5) The FSA rapidly brokered a deal with ING, via which the KE UK customer base / customer deposits transferred to the UK arm of the Dutch bank.

6) The transfer was the best thing that could have happened to KE depositors and the UK taxpayer. This is because if KE had gone under (as it subsequently did) the mad Alistair Darling had already promised 100% compensation to IceSave depositors (i.e., over and above the FSCS £50k limit) and so would have been compelled to extend the same guarantee to KE depositors whose claim certainly had a damn sight more validity than IceSave customers. So the UK taxpayer would have been stung to the tune of yet more £billions. Instead, the UK taxpayer is now not at risk of KE default, and KE depositors now have a compensation guarantee of almost £77,000: considerably more than they enjoyed by way of guarantee under the UK's FSCS.

7) ING acquired the book of £2.6billion deposits / 160,380 UK KE customer accounts last Wednesday. That book included both transferred and non-transferred funds. ING was therefore faced with the very real issue of sorting out the wheat from the chaff, i.e., what monies it was actually taking under its wing and what monies it was to transfer out and back to the depositors.

8) ING worked remarkably quickly. By Friday, a period of not much more than 48 hours, it kick-started the transfer process and the first transfers went through on CHAPS (whether they were CHAPS or not.)

9) Individuals such as myself, whose transfers were "confirmed" as long ago as Saturday morning, October 4th 2008 received their money from 1pm onwards on Friday, October 10th 2008.

10) Mine was a BACS transfer. The earliest it might feasibly have reached my account was by close of day, Wednesday, October 8th. That it took just one-and-a-half days longer is, considering the chaos surrounding all this, little short of amazing.

11) No transfers are occurring this weekend (well, I'm not aware of any) so those still outstanding -- most likely involving KE depositors who initiated transfers one, two or even three days after people like myself -- should go through over the next three working days as they're all likely to be treated as CHAPS, even if they were originally BACS.

12) An operation of this kind and on this scale is bound to be fraught with difficulties so some depositors are bound to be in a position on Wednesday next, October 15th 2008, when they haven't received their money. In that case, they should contact ING UK.

13) Though as I know from my own experience that the "disappearance" of transferred funds is hugely unsettling, the reality is that:

a) no money went out of Kaupthing Edge UK to its parent bank so:

b) that money is still on deposit in the original account.

Although anxiety and gut-reaction are understandable at this time, even the briefest pause for reflection will bring the realisation that ING UK and its staff have done an astonishing job with the management of 160,380 accounts of which it wasn't remotely aware of this time last week. Only a massively resourced financial institution -- which ING is -- could have managed such a task.

As to all those who have posted about transferring out of ING, or alternatively, of not putting their transferred funds back into their ING-administered KE account, well, that's their decision.

Candidly, it makes no financial sense at all: within the space of just one week, their savings have been protected up to £35,000, then up to £50,000, and are now protected up to almost £77,000.

That protection is iron-clad: EU law guaranteeing depositor safety applies to ING in a way it never, ever applied to the so-called guarantee of an Icelandic protection fund that could barely withstand the effect of one bank collapse, never mind all Icelandic banks.

Having just seen my level of savings protection more than double, I'm very, very happy to have returned my savings back to ING.

And very happy that ING has done so outstanding a job on behalf of myself as a saver, and -- equally importantly -- as a UK taxpayer.

sweetfreedom

Codger,
You make some very good and concise resume points.

However, if this week continues to be as volatile as last week I am not too sure if transferring funds back into ING is a good idea. Rememeber that although the ING compensation scheme is 100k eu (approx £77k) it is not a UK FSA scheme and if the 'poo hits the fan' right accross europe you would have to attempt to retrieve your money from a foreign bank based abroad.

It is traumatic enough trying to claim anything in the UK but claiming from the Dutch authorities could be a very long process.

Personally, I'll wait for my £50k to arrive back and then take a view then. Favourite for me will probably be my burgeoning N. Rock account!

UnhappyHarry

Whilst I take on board a lot of Codger's view, it doesn't get away from the fact that ING's management kept everyone in the dark (including the Treasury, APACS and FSCS) about what they were doing, and when. (Witness the fact that all these organizations stated that transit funds would bounce back to the original accounts; that didn't happen, and they could only have got that information from ING, unless they just made it up).

ING must have known well in advance of their intentions to start processing these transfers on Friday: why didn't they notify all the worried depositors to ease their minds?

As Mable said earlier, she won't trust any bank. I'm inclined to agree.

Tony_Webster

As things got hairy with Icesave last weekend, I seriously considered bailing out of KE as it was clear one would bring down the other. However, as my funds were in a fixed term deposit, there seemed little prospect of getting out in time. So I decided to sit and wait (not an option open to everyone I know, although if that's the case, why was it in a fixed term to start with ?) and hope that the Govt would do a B&B-style rescue or trust in the FSCS.

So far, looking at the chaos and understandable worry on this thread, I'm glad I did. Whether I stay with ING depends on whether they honour the fixed rates. If they use a loophole to change the fixed rate, combined with the switch to the discredited passport protection, I'm out of there.

goodethernet

codger wrote: »

Just to clarify:

6) The transfer was the best thing that could have happened to KE depositors and the UK taxpayer. This is because if KE had gone under (as it subsequently did) the mad Alistair Darling had already promised 100% compensation to IceSave depositors (i.e., over and above the FSCS £50k limit) and so would have been compelled to extend the same guarantee to KE depositors whose claim certainly had a damn sight more validity than IceSave customers. So the UK taxpayer would have been stung to the tune of yet more £billions. Instead, the UK taxpayer is now not at risk of KE default, and KE depositors now have a compensation guarantee of almost £77,000: considerably more than they enjoyed by way of guarantee under the UK's FSCS.

You make it sound like ING PAID for the deposits of Kaupthing Edge in the UK. I think you will find that HM treasury PAID ING Direct +/- £2.5bn to take it on, so the cost to the Taxpayer is the same, whether it's paid out via the FSCS or simply administered by ING Direct in the way of a "take over". Politically, one massive claim on the FSCS (icesave) is better than two (icesave AND KE).

Deposits are LIABILITIES in banks' balance sheets, not assets, so somehow giving the impression that ING stepped in to fund the whole thing and save KE is just plain wrong. The government bailed it out, just by another mechanism, that's all. The UK taxpayer HAS been stung for the value of the KE deposits, just not many people have spotted that yet. It simply cannot be any other way. ING might have taken a discount to acquire the customers but not much, I suspect.

It could be that the government will recover some of the value from the Icelandic government, but I can't belive ING took that on trust and would have wanted to see the colour of the treasury's money before they stepped in.

whitesatin

Does anyone know when BACS/CHAPS resumes normally after the weekend, e.g. is it midnight or first thing tomorrow morning. Normally when I log on to my HSBC account, it has been credited/debited overnight during a working week.

Is it worth checking after midnight tonight to see if my savings have been transferred in or is it likely to be tomorrow or afterwards?

behelzebub

From The Fo website ..

Payments are made electronically and should start and finish on the same day. CHAPS opens for business at 6.00am each day and payments usually have to be started by 4.00pm. But there is a facility to make
late payments, in certain circumstances, up to 5.00pm.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/42/42.pdf

whitesatin

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[FONT=Verdana, Arial, Helvetica, sans-serif]Editing this as there is another thread about this[/FONT]