The ISA transfer black hole

Slater

I recently initiated an isa transfer request from Natwest to Bradford and Bingley. My old Natwest isa was closed on 16/10/08 and they have told me a cheque was sent to B&B on the same date. As of now my new B&B isa has not been opened and they say they are still waiting for the cheque.
I have read many posts in this forum about money disappearing into a black hole for weeks or months but my question is - who actually has possession of the money. Natwest or B&B? surely it's still Natwest because the cheque hasn't' cleared into my new account.

cwcw

I was in the same position about 18 months ago when transferring my ISA from A&L to Yorkshire Building Society. Weeks went by with A&L showing £0 and YBS also showing £0. I kept chasing them on the phone until A&L agreed to send another cheque (with the additional interest) to YBS, assuming it had gone missing in between. Within 2 weeks the new cheque was credited to YBS, and then the old cheque was also credited soon after, so I'd doubled my money! Unfortunately, they deducted the old cheque straight away. The whole process took the best part of 2 months. Hardly seamless.

whu

Slater wrote: »

I recently initiated an isa transfer request from Natwest to Bradford and Bingley. My old Natwest isa was closed on 16/10/08 and they have told me a cheque was sent to B&B on the same date. As of now my new B&B isa has not been opened and they say they are still waiting for the cheque.
I have read many posts in this forum about money disappearing into a black hole for weeks or months but my question is - who actually has possession of the money. Natwest or B&B? surely it's still Natwest because the cheque hasn't' cleared into my new account.

I would imagine NW but wouldn't be too worried yet - chase BB next week to see if they have received it -as you have read some of these things take ages so the fact that your account was closed less than a week ago and the money hasn't arrived is probably not too bad a position to be in-good luck

Slater

I was just wondering who actually has the money in their account. If my account's been closed and a cheque has been sent but has not cleared, the money must still be with Natwest. Where do they put it while it's waiting to clear?

It's not a good feeling seeing my account closed and my money disapear

innovate

Unless it's over 50K, don't get stressed out by it, your money is protected under the FSCS scheme. And it's bound to arrive eventually.

Of course, it's a right pain in the proverbial having to check all the while that the money actually does arrive. I think the banks are allowed (sort of) to take 4 weeks over it - which is disgraceful in this day and age. If it does take any longer, I suppose you have good reason to complain, in writing, to the CEO of the receiving bank. If I had to do this, I would also ask for compensation for the undue stress they subjected me to, for the time I had to spend to check they are doing what appears to be a rather simple job, and for having to write a letter to them. The going rate for this sort of thing seems to be some £30 - £50 every time a bank is sending us a letter, so I suppose we have a valid claim for similar amounts.

Mikeyorks

Slater wrote: »

Where do they put it while it's waiting to clear?

Into one of their 'suspense' accounts.

Slater

I contacted Natwest again to ask where the money is. They said the money has been sent by cheque on the 16th. I told them B&B have still not received the the cheque so they(Natwest) must still have the money. They seemed to think the cheque is the money and do not know if they still have it in a suspense account waiting to clear.
They are going to put a trace on the cheque to see if it's been cashed.
I have no records of ever having and isa with Natwest or how much was in the account. Not good:(

furndire

Not with Nat West, can't remember which bank, but we had this problem a couple of years ago. For some reason we ended up waiting 6months for the money to turn up ~ in the end they said it had been held up because of money laundering (load of b..lcks) In the end they had to give us interest + £150 compensation. We were using it as a deposit on a house ~ luckily we were able to find another way of finanacing.

Milarky

Mikeyorks wrote: »

Into one of their 'suspense' accounts.

I was going to "but at 0%!" The reality is that interest on the uncashed cheque - if it ultimately does not get paid to the customer - is a cash savings to the banks' bottom lines. It's more theological to consider what the precise percentage split is.

Defenders of this system may come on and say; "red tape", "regulation", "compliance costs" dwarf the little bit of profit the use of cheques accrues to ISA providers - but that overlooks the already discounted rates that the account are offered at (I would guess ISA interest is 10-15% less than equivalent taxable accounts will pay) When the government created cash ISAs they must have realised that a cartel of rates would prevail - and that as time passed - and total cash ISA deposits increased as a proportion of the whole banks would have ever greater incentives to pay one rate for Tax free and one rate for taxable...

Slater

Good news for me. The money has turned up at Bradford and Bingley today and my account has been set up. So my money was in the black hole for 12 days.

I made a comlaint to B&B head office 2 days ago. I wonder if this made a difference?