Super Complaint into Cash ISA transfers launched - let the OFT know you views

edited 27 April 2010 at 7:33PM in ISAs & Tax-free Savings
87 replies 12K views
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  • rocketonerocketone Forumite
    12 Posts
    If the ISA 'super complaint' is a valid one for Consumer Focus to pursue, and I think it is, then what about the infinitely more important area of mortgages which have been so grossly mis-sold in recent times by banking cowboys.

    As a result of the deviousness of the mortgage market and the unfairness of mortgage contracts, hundreds of thousands of homeowners face re-possession and eviction and an even larger number who survive this trauma still face being thoroughly ripped off with endless 'penalty' charges relating to their mortgage contracts.
  • I always move my ISA when the rates go down, and so have done at least 6 times since they were introduced. My experience is that banks, knowing that they have 31 days, sit on transfer applications until about day 28. Last year I accidentally wrote my husband's account number on my form, but it wasn't until day 28 when someone began to process it that this came to light. There followed a triangular pattern of letters, because the banks won't speak to each other and use snail mail instead of phone calls or emails, and over 4 months passed before someone at my existing provider decided to accept a fax from from the receiving bank and finally the transfer was done. Because the fixed rate had ended, from Feb to June my £48k ISA was earning 0.1%. It's authorised robbery!
  • I completely agree with speeding up transfers and the other points but I personally am quite happy to keep transferring my ISA each year to get the best deal. I hope that any changes to the rules does not reduce the interest of the highest paying accounts even if it does just last for one year as this will be of detriment to the people who are willing to put in the effort to switch each year.
    Mortgage £120K, monthly overpayment £600, 18 years and £100K saved
  • samizdatsamizdat Forumite
    398 Posts
    To pick up on johncolescarr's points, the fact is that the relatively attractive rates paid on market-leading accounts only exist because of the barriers to switching.

    This is the eternal dilemma for Moneysavers. Much of what makes Moneysaving practices so profitable relies on the poor value received by the vast majority of consumers, who effectively subsidise those with the time and inclination to shop around the whole time.

    However, viewed objectively, much of this switching activity is non-productive in economic terms. What we, as a society, really need is a radical change in commercial practice enforced by market regulation.

    I propose the following, for starters.

    1. Banks to be obliged to offer at all times one and ONLY ONE instant access account with the same rate paid to all customers. No account opening incentives would be permissible. Tiered rates would be allowed. Transaction fees would not be allowed. At a minimum, access via BACS transfer to any other UK bank account would be allowed. No restrictions would be placed on available access channels, e.g. branch, post, internet and phone access could each be offered, or not, provided no fees were charged.

    2. A maximum of two further notice-period savings accounts could be offered (e.g. 30-day and 90-day notice) but otherwise subject to the same restrictions.

    3. Fixed rate bonds could be offered but again only a limited number of separate accounts at any one time, e.g. a max of 2 accounts with maturity up to one year; a further 5 accounts with maturities up to 5 years.

    Then I would do the same with utility companies, e.g. just one variable rate supply tariff and a limited number of fixed rate tariffs.

    This is the type of radical reform that is needed. Then we could all just stop wasting time and effort on marketing campaigns, switching, affiliate networks, and all the rest of it. MSE would become less important and Martin would make less money. But the World would be a better place.
  • davidgmmafandavidgmmafan Forumite
    1.5K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
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    ISA transfers are FAR too slow, and stories of woe are soooo common I can't help thinking it will put people off switching and make the market less competitive. I cannot for the life of me understand why delays which are out of the customers control should mean any loss of interest. It would seem a reasonable provision in, such a circumstance, for the provider to be forced to pay the prevailing rate of interest (ie what they initially signed up for) even if this is much higher than the current rate. You could even give them an incentive to pull thier finger out by forcing them to pay a HIGHER interest rate.

    However I am not optmistic about the OFT getting involved, let me remind you that it took TWO YEARS for them to decide that its perfectly ok that there is absolutely nothing to stop banks whatever they like for returned/paid items and unauth OD fees.

    The headline sounds good but will there be effectvie action? And if some rules are agreed will they be enforced and by whom?

    PLEASE not more of this self regulation rubbish.
    Mixed Martial Arts is the greatest sport known to mankind and anyone who says it is 'a bar room brawl' has never trained in it and has no idea what they are talking about.
  • I confess I've never understood why ISA transfers are done by cheque in these days of electronic transfers. I'm convinced it's just a convenient delaying tactic by Banks. Odd that some adverse comments should be reported about Santander/Abbey. I'had exactly the same problem when transferring between A&L and Abbey ( both Santander!) last year. What a complete mess they made of it although all was resolved after a few weeks and several letters of complaint.
  • afwoneafwone Forumite
    78 Posts
    The ways that Cash ISAs are being run with miniscule interest rates and long delays between transfers is a disgrace. This really needs sorting out.

    But don’t stop there. Look what the Stocks and Shares ISA providers are getting away with. The value of small shareholdings can get whittled away by punitive administration charges. They also try to prevent moving accounts elsewhere with exit fees of up to £50 or more in addition to separate fixed charges for each shareholding.

    Schemes designed by the Government to encourage saving and investing are being abused.
  • keet83keet83 Forumite
    226 Posts
    It took barclays, 23 days i believe when i opened their ISA in 2007/08. there was no transfer being done due to them not allowing transfers, and i didn't have any previous ISAs anyway.
    [STRIKE]Beggars cant be choosers, but savers can![/STRIKE]
    That used to be the case :mad:
  • prudence41prudence41 Forumite
    156 Posts
    I put in an ISA transfer request to NatWest on 31 December 2009 to transfer in a previous ISA from Abbey (now Santander). Having completed two other transfers from Nationwide and IF in c30 days, I expected the same.

    However it didn't happen until 1 March 2010! Santander said that they did not receive the initial request from NatWest and only actioned the request after the second request was received in writing. And to add insult to injury, the transfer amount is paid in the form of a cheque. How can banks in their right minds justify making significant payments by cheque in the post when they are phasing out paper cheques and joe public uses electronic transfers?

    Let's get some ISA rules that don't disadvantage consumers at every turn.
    I wanna be Mortgage Free by February 2013
  • ray123ray123 Forumite
    659 Posts
    It took nationwide almost three weeks to undertake an internal transfer from an instant access ISA to a fixed rate ISA. What a shambles.

    I have voted with my feet and avoid nationwide like the plague.
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