Natwest Messed up my ISA

Mardrew

I hope you don't mind me jumping onto this thread but my query is related and I really would welcome some advice.

On 26 Feb I applied online to open an ISA for 08/09 for £3600. There was some to-ing & fro-ing of paperwork as I also had to open the E-savings account but received confirmation on 18 March that this had been done. My ISA cheque was with them at this point and just assumed the ISA would be opened. I was confused and surprised when I received an ISA statement showing that my ISA balance was nil but as I was extremely busy with other things at the time I never chased this up. (Totally daft, I know!!) Well, you can imagine my surprise when I noticed that this cheque was debited from my current account on 1 June! (This also sent my current account into a negative balance.)

I sent Nat West a letter asking them what had happened and to confirm if the cheque had gone against an ISA for 08/09 (as originally intended) or 09/10. I received a letter from them apologising and saying they could offer no explanation for what had happened. As I have already taken out an ISA for 09/10 they returned my cheque for £3600. In the letter they made no offer of compensation - I didn't mention compensation in my original letter - other than they may consider reimbursing me for any bank charges I may incur as a result of their delay in processing the cheque. (I did mention this in my letter but, up to press, no charges have appeared in our Alliance & L a/c.)

What should I do now? Am I entitled to compensation? Should I get in touch with the Financial Ombudsman or should I get back in touch with Nat West asking for compensation? (I would appreciate some help with the wording of such letters.)

Many thanks

masonic

Mardrew wrote: »

What should I do now? Am I entitled to compensation? Should I get in touch with the Financial Ombudsman or should I get back in touch with Nat West asking for compensation? (I would appreciate some help with the wording of such letters.)

You will need to complain to Natwest and exhaust their complaints process before you can complain to the Financial Ombudsman. It is certainly reasonable to ask for compensation, because you have suffered a loss (of interest and a tax free allowance for life) because of a mistake that they made.

As far as wording a complaint is concerned, just keep it simple and factual. Describe the sequence of events that ended with you discovering they had made a mistake. Outline exactly what you have lost (20% [or 40%] tax deducted from the interest on your £3600 every year for as long as you planned to save that money). Then, ask them to reimburse you for that loss.

masonic

I'm currently in the process of transferring out of Natwest and things aren't looking much better on this side either. Newcastle BS forwarded my transfer form on to them on the 10th July and as of today, my ISA funds are still sitting in my Natwest account. Natwest already holds a record with me for longest inward transfer (3+ months) and now hold the record for longest time to respond to an ISA transfer request (mainly because every other ISA manager has managed to forward the funds within a week).

Given my past experiences with Natwest, I'm more than a little concerned that 30 days will go by and I'll be told they never received the transfer request. I just hope when I contact them to find out what's going on, they won't use their standard line 'transfers can take up to 30 days, we can't look into this for you until after that time'. Perhaps I am just being a little impatient at this point...

ninja-lewis

notwest wrote: »

I thought I was the only one until I read these messages. I had exactly the same problem. I even opened a savings account with Natwest just so that I could open a 08/09 cash ISA. They've put the £3600 in a 09/10 ISA - which I didn't apply for! They've offered me 1 year's interest as compo which I've turned down and I am now putting together representation to the Financial Ombudsman. They've told me they won't make a better offer.

The standard FOS offer for a lost ISA investment opportunity is five years taxable interest, usually at the basic rate of 20% (unless you have strong evidence to show that you would have been liable for the 40% over that period). That's the method I was given and it is also detailed in one of their newsletters IIRC (try the ones around April each year since they usually deal with end of tax year issues). Check out the HMRC Guidance Notes for ISA Managers, which is available from www.hmrc.gov.uk/isa too.

FWIW, I had exactly the same happen to me for 07/08. Before I went to the FOS, the bank had actually offered 5 years compound interest, which the FOS recommended in lieu of their own offer. However, the matter hasn't entirely been settled yet (the bank were very tardy with paying up amongst other matters).

The_Enforcer

I left my completed ISA transfer form with a local branch to post to their HQ on 10th June 2009.

The funds in question are still accruing interest in my Standard Life ISA, but it sounds like this delay of 6 weeks minimum is in keeping with the experiences of others on here and isn't totally unexpected.

My difficulty relates to keeping a track on the whereabouts of the form: The form could be either:
1 - lost;
2 - in someone's in-tray awaiting attention at Natwest HQ; or
3 - at Standard Life awaiting their attention under the 30-day rule.

Has anyone received a letter from Natwest to either:

a) confirm their receipt of a transfer form;
b) confirm they have requested funds from a current provider;

or do they only carry out such tasks when prompted by the customer?

Also does anyone have an e-mail contact for Natwest HQ, which would be prefereable to the generic telephone numbers (that cost more time and money to be put on hold and passed around the departments only to find they don't know the answer than the additional interest gained from making the transfer in the first place)? As their commercials like to remind us, there has to be "another way".

Thanks in advance.

TE

masonic

The_Enforcer wrote: »

My difficulty relates to keeping a track on the whereabouts of the form: The form could be either:
1 - lost;
2 - in someone's in-tray awaiting attention at Natwest HQ; or
3 - at Standard Life awaiting their attention under the 30-day rule.

Has anyone received a letter from Natwest to either:

a) confirm their receipt of a transfer form;
b) confirm they have requested funds from a current provider;

or do they only carry out such tasks when prompted by the customer?

In my experience, they don't carry out such tasks even when prompted by the customer. The first I knew of my transfer being received was when my existing ISA manager contacted me to say they'd sent the funds (and for another transfer, Natwest could not tell me what was going on until after 30 days had elapsed and they admitted they lost the form).

Also does anyone have an e-mail contact for Natwest HQ, which would be prefereable to the generic telephone numbers (that cost more time and money to be put on hold and passed around the departments only to find they don't know the answer than the additional interest gained from making the transfer in the first place)? As their commercials like to remind us, there has to be "another way".

They probably won't discuss account specific enquiries by e-mail, but you could try customer.relations(at)natwest.com. It seems as though enquiries have to go through your local branch unless you make a complaint and escalate to their customer relations unit (which has a freephone number and freepost address). Good luck getting an answer. I certainly couldn't when I tried.

Mardrew

Following on from my post earlier on in this thread (no 22) - and thank-you to Masonic for the reply - I sent a letter to Nat West asking for compensation. I have had a reply telling me that they have credited £115.56, which is the equivalent to 12 months interest, into my E-Savings account. Am I right that people think this is not an acceptable amount? If so, what do I do next?

Many thanks for any help.

Mardrew

malik999

Just a quick reply to thank those people who have posted their 'horror' stories in this thread.

This type of problem had never even occured to me.

From what i have read i will now ensure I open a ISA no later than February each year to avoid the bank opening the wrong tax year. I really do feel for those people who have lost a ISA allowance. I too would be very anoyed.

MarkyMarkD

There is no reason to leave it until 5 April - unless you are really short of cash, in which case it is unlikely that losing a year's ISA allowance is going to make that much difference in the long run. I don't know why people go mad in the last few days of the tax year!

masonic

Mardrew wrote: »

Following on from my post earlier on in this thread (no 22) - and thank-you to Masonic for the reply - I sent a letter to Nat West asking for compensation. I have had a reply telling me that they have credited £115.56, which is the equivalent to 12 months interest, into my E-Savings account. Am I right that people think this is not an acceptable amount? If so, what do I do next?

Whether or not it's a reasonable offer depends on how much money you save per year. If you are planning to use your full ISA allowance every year for the next 10 years, then clearly the £115 you have been paid will not fully compensate you for the £3600 you can't put into the ISA because of their mistake. What you have been given covers your losses for about 4 years.

If you take a typical interest rate of 5%, you'll lose £36 per year to the taxman, every year until you run out of taxed savings to move into an ISA. Calculate how much this is likely to cost you and ask Natwest for that.