Beware Santander and accuracy of ISA interest rates

japonicaf

This is to warn people to be very careful to check that Santander is paying the correct interest rate on its ISAs, and is not shortchanging the account holder. I have now been bitten twice by Santander, and am extremely wary!

The problem first arose back in March this year (I started a thread about it in this forum and got some useful replies) when I found that Satander had paid me too little interest on an Direct ISA issue 3 which was supposed to have had a 1.5% bonus on it over the previous 12 months.

In March 2008 I had opened an [at that time] Abbey Direct ISA issue 2. The bonus on the ISA expired after a year, and at end of Feb 2009 I switched to an issue 3 with a 13 month bonus at that time of 2.5 per cent.
But when the interest was paid on 1 March this year, I found an interest rate of only 1.1 per cent had been applied. Santander claimed to have no record that I had switched from issue 2 to issue 3. I had to go through an awful lot of complaining to different people for them finally to admit in writing that they owed me more than £550 unpaid interest, because I had indeed changed to issue 3, and that they should have been paying a bonus of 1.5 per cent during the year. They also agreed to send me compensation of £50 in view of all the trouble this had caused me.

I then transferred to issue 6, to start a new bonus period. I insisted that this be confirmed in writing, and have a letter from Santander confirming that in March this year I transferred to issue 6.

The starting rate of interest, including bonus, should have been 2.75 per cent. Today I thought I'd check the interest rate. I phoned up - and lo and behold it was only 1 per cent! The guy I spoke to said he could see from the system on his screen that I had opened the ISA in 2008 and that there was no record that I had ever switched ISA to a newer issue - when I had in fact done this in 2009 and 2010!

Despite the fact that he was on the ISA number on the switchboard menu he told me I would need to "call the ISA team" (what is he then?). Of course, when I called the number he gave me and got though the multiple choices I was told the ISA team leaves at 6pm and by then it was 7pm. The guy then called me back and said he had talked to his supervisor, and that I was right and that the interest rate should have been 2.75 per cent. It was just that this hadn't shown on his "system" which was "different" to hers!

What is going on here? In explaining the previous error over unpaid interest, Santander blamed "system error". The institute seems to have major system issues, and is simply not to be trusted.

I now very much regret not switching away from Santander to another ISA provider once the previous issue of interest had been sorted out, rahter than switching to a new issue. I now worry that even if I do transfer to another ISA provider, Santander will again miscalculate the interest applicable to the final transfer balance and will be very slow in transferring.

I would also say that the attitude of Santander staff leaves something to be desired. They are all too often of the Little Britain lethargic "computer says no" customer is always wrong persuasion, rather than admitting that something has clearly gone wrong and trying to put things right. I got the feeling with my previous complaint, when I kept being sent round in circles and told different things, that the hope was the customer would give up in the end.

It might help if ISA providers changed the number of the account when one upgrades to a newer issue, to make it crystal clear when the account was opened and whether the bonus still applies.

japonicaf

Just for the record, the day after posting this I contacted the ISA team at Santander and this time a very helpful woman immediately recognised the member of staff had made a mistake the previous day in telling me my interest rate was only 1% rather than the true 2.7%. Not only that but she phoned me back after a few minutes and said she had been speaking to her supervisor about the case, and would I like wine or a bunch of flowers. The next day a beautiful big bunch of flowers arrived courtesy of Santander!
This was impressive; but it would have been even better if Santander's computer systems had been in good working order so that there was no way staff would be telling people the wrong interest rate on their ISAs.

DopeyDylan

Looks like they've just bitten me in the same way...

I have the issue 3 ISA and have just moved to another provider, yet the interest recieved should be:
3%aer on 14k for approx 7 months (approx £250) and
3%aer on 19k for the remaining 5 months (approx £250)
yet I've only got around £200!

Do you have any advice on how I should resolve this as you've already gone through the pain?!!

Also, any idea how it will work as because I've moved my ISA to another provider, the 'missing' interest is outside my ISA now. Can it be re-inserted without breaking my yearly allowance?!

Thanks in advance,
Dylan

japonicaf

Have only just seen your posting - don't know if your issue is now resolved. One problem was the difficulty in getting from Santander printed confirmation of the precise date on which one issue of an ISA is upgraded to a new issue. My problem over interest earlier this year was initially because they tried to claim I had been in issue 3 all along and my bonus had expired - despite issue 3 not even existing back in 2008 when I opened an issue 2 ISA! How did I resolve the problem? Through endless phoning, getting "heavy" on my side, eventually going into the complaints process. I got all the interest I was owed paid to me in the end - but it took a great del of persistence, and worry. But then I had a problem again with issue 6... It was only resolved because I happened to come across a very reasonable woman in the ISA dept (hence the bunch of flowers as apology). But despite my asking for printed confirmation of the date when I upgraded to 6, all I have had is a letter saying I am now in issue 6 - but failing to give a date - and a statement of transactions from 31 March to 28 July that fails to mention the number of the issue. After the latest negative publicity about Santander I have decided to move my ISA to another provider, and am now worried that the wrong interest rate will again be applied (1 per cent, rather than the 2.75 currently paid on issue 6). When I rang up today, I was told by the call centre in India that my ISA is blocked because I didn't fill in a form and take identification to a branch at the time of upgrading. But I had never been told this was necessary, and upgraded over the phone! To unblock I now have to go to all the hassle of going to branch with identification - and our local branch is notoriously inefficient. And yet I went through all this when I first opened the ISA in 2008, and the account number today is just the same as it was then. All that has changed is the number of the issue.