I transferred an ISA and demanded no gaps in interest - I won!

4$£&*(£$&*(!

I was with Standard Life until recently, their ISA was around 2.75% but dropped to 2.3% at the beginning of this month. In preparation for this fall I had lined up Principality as my new provider. Standard Life closed my account on 24 September and Principality opened it on 4 October.

I called Principality to check what the delay was and they said they had a backlog of transfer-ins, however the funds were sent by cheque to them and cleared on 30 September so I would start accruing interest from 30 September not 4 October.

You'll notice between 25 September to 29 September the black hole of interest. I read with great interest the OFT report on how long banks should take to transfer ISAs and their view that no interest gap should exist. The amount I'm talking about isn't great, small change to some, but it is the principle of it.

So off I go phoning Standard Life and a rather rude chap answered the phone first of all, not even willing to look at my account details until I said I had enough and wanted a manager. The manager couldn't get their head around my question at first as he said no-one had asked him this question before but he then insisted there was no gap. I asked him to explain this, he said from the point of the ISA closing with them to the point it opened with my new provider they had set aside my funds so no interest could be earned on them. I argued in retaliation that they still had my money, they could use it effectively as an asset until the day of its release, I wanted that interest as I felt I am entitled to it!

Still no joy, so I said fine, let's not be emotional about this. We can go one of two ways. You can either write this off as a goodwill gesture, it'll cost you a few quid, send me a cheque, end of the matter. We'll resolve it quite low level, I'll be happy, you won't have hassle. Or we can go the other way, which is you say no, I escalate, you still say no, I go to the Ombudsman, I refer them to the OFT supercomplaint, they have to reply to the Ombudsman after building up a background case and notes for them, they have to allow me a response, by this point the original amount of money I was asking for is shadowed by the huge staffing resources you're now pooling into my complaint.

I agreed for the matter to be escalated to their customer resolution team who called me back tonight, and guess what, a cheque is winging its way to me.

I hope this spurs others to ensure you are asking for any gaps of interest during ISA transfers. It's not right and someone is profiteering from money that is yours. Do as I have done, challenge it, be prepared to escalate and go to the Ombudsman if you get nowhere at first. This could be the next 'bank charges' scenario.

alastair_h

Well done, any arguments put in that way usually work. It's nice to see people standing up to the banks - if more people did this they would be less inclined to try it on.

dunstonh

It's not right and someone is profiteering from money that is yours.

Many would say that blackmailing them into paying it is not right either.

alastair_h

dunstonh wrote: »

Many would say that blackmailing them into paying it is not right either.

I don't have much sympathy for bankers at present, until they play fair with customers I think they should get what they deserve - where would the interest have gone for the time the ISA was being changed over? In to profit no doubt.

4$£&*(£$&*(!

dunstonh wrote: »

Many would say that blackmailing them into paying it is not right either.

Ah, the man on the side of the banks view. Let me get this straight. OFT has said there should be no gap, I presented this info to the bank, they chose the easy way out. How is it blackmail?

Run for the hills consumers, don't threaten to enforce your rights it could be viewed as blackmail! Surely you can see why I am cynical of your view (and clearly disagree with it), OFT have made a full report on this matter and you are intimating I don't take this up?

dunstonh

Ah, the man on the side of the banks view

Really? Its certainly not how i picture myself. Given the way banks have consistently mis-sold products over the years and their aggressive low skilled "marketing". However, I don't see the point of jumping on the anti-bank media led bandwagon that says everything a bank does is wrong.

Let me get this straight. OFT has said there should be no gap

the OFT has secured industry agreement to reduce transfers to 15 working days from the end of this year. Savers must also accrue interest no later than two days after funds are received from the old provider. 2 days is not the same as no gap.

How is it blackmail?

You threatened the use of the FOS which would cost them £500 explicitly (ignoring costs of admin). So, effectively you used that to blackmail them into paying a couple of quid rather than pay £500 if you followed through on your threat.

4$£&*(£$&*(!

dunstonh wrote: »

the OFT has secured industry agreement to reduce transfers to 15 working days from the end of this year. Savers must also accrue interest no later than two days after funds are received from the old provider. 2 days is not the same as no gap.

Report conclusion 8.10 (my highlighting):

The BBA and BSA have agreed to ensure that consumers start to accrue interest no later than two days after the funds are received from the old provider. We do not believe that this is sufficient. We consider that consumers should receive interest for every day during the transfer process since the OFT understands that one of the providers has the consumers' money at all times during the transfer process. We note that a number of providers already backdate interest from the date of closure of the existing cash ISA account. This ensures that consumers receive interest on every day.

dunstonh wrote: »

You threatened the use of the FOS which would cost them £500 explicitly (ignoring costs of admin). So, effectively you used that to blackmail them into paying a couple of quid rather than pay £500 if you followed through on your threat.

So you are suggesting I should not have followed through my complaint based on the conclusions of the OFT report section 8.10?

I rather get the impression you have attacked me (as you have before) based simply on an idea you don't like. What is actually frightening about this is you don't appear to have read the report as you are referring to BBA and BSA policies and the OFT has ruled these policies are inadequate.

I am concerned you are attacking me, accusing me of blackmail, whilst your tag declares you are a financial professional therefore some may draw a conclusion your position holds more weight than a non financial professional. Yet amidst all of your attacking and accusations you have not even read the report and you refer to policy made before the report reached its conclusion.

I would have thought one of the foremost things a financial professional should be doing is keeping abreast of changes in policy, certainly before attacking me in such a public way.

All this aside, I hope others are quick off the mark to follow this through and don't be put off by bad information from those in the industry. If others are transferring ISAs, remember either one organisation has your money or the other one does. Claim what is YOURS, the banks have had enough public money, don't give them yours on a plate.

dunstonh

Report conclusion 8.10 (my highlighting):

The BBA and BSA have agreed to ensure that consumers start to accrue interest no later than two days after the funds are received from the old provider. We do not believe that this is sufficient. We consider that consumers should receive interest for every day during the transfer process since the OFT understands that one of the providers has the consumers' money at all times during the transfer process. We note that a number of providers already backdate interest from the date of closure of the existing cash ISA account. This ensures that consumers receive interest on every day.

What the OFT considers and what was agreed appears to be two different things though.

So you are suggesting I should not have followed through my complaint based on the conclusions of the OFT report section 8.10?

Not necessarily. I was just remarking on your comment:
It's not right and someone is profiteering from money that is yours.

You are effectively profiteering because you know it costs them £500 if you escalate your complaint to the FOS. You admit to saying give me a few pounds or I will make sure you are charged £500.

Does that make you any better than them?

I rather get the impression you have attacked me (as you have before) based simply on an idea you don't like.

I have no opinion on it either way. Its not a subject that bothers me in the slightest.

What is actually frightening about this is you don't appear to have read the report as you are referring to BBA and BSA policies and the OFT has ruled these policies are inadequate.

My understanding based on the FT article on the subject was that there is a difference of opinion in what the OFT thinks is right and what the BBA & BSA think but that 2 days was the agreement.

http://www.ft.com/cms/s/2/8bd2bdc6-cd82-11df-9c82-00144feab49a.html

Yet amidst all of your attacking and accusations you have not even read the report and you refer to policy made before the report reached its conclusion.

Where does it say that they have to pay interest through the transfer period?

Its not in the report, its not on the OFT announcement and its not on any of the media sites that reported it.

I am concerned you are attacking me, accusing me of blackmail,

I'm not attacking you. Its a discussion board and I am just adding discussion. Partly as devils advocate in response to a particular phrase you used.

4$£&*(£$&*(!

I would consider an accusation of blackmail an attack, but I am putting that one to bed in the spirit of not feeding the Mr Trololo's.

And I'll say it again generally, the OFT has concluded it is unfair for any gap in interest during an ISA transfer. If you are transferring make sure you get the interest you would have accrued during the transfer process.

Others on this forum may not like it but it is money you are entitled to!

sunil1234

how much was this interest anyhow?

4$£&*(£$&*(!

sunil1234 wrote: »

how much was this interest anyhow?

Enough to get a couple of reasonable rounds in