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

Consumerist

jem16 wrote: »

However if you demand money from the thief to stop you from going to the police to report the crime then yes you are blackmailing the thief.

So, if I demand that the thief return my property (no more, no less), or else I will go to the police, you call that blackmail ?

Consumerist

dunstonh wrote: »

. . . However, if you tell an honest person you will go to the police and accuse them of theft then that is a closer match.

I disagree with your notion that the situation you describe applies to the OP's situation.

The bank owed him interest on his savings which they refused to pay. That is effectively theft and therefore dishonest.

jem16

Consumerist wrote: »

So, if I demand that the thief return my property (no more, no less), or else I will go to the police, you call that blackmail ?

No as a crime has still been committed and a law has been broken.

The bank has not broken the law in not paying interest for the time it didn't have the money (or the property for that matter )

Consumerist

jem16 wrote: »

No as a crime has still been committed and a law has been broken.

The bank has not broken the law in not paying interest for the time it didn't have the money (or the property for that matter )

I am fully aware that banks do not commit criminal offenses by the way they deprive us of our money. The thief/police scenario was clearly an analogy.

If I refuse to pay a debt I owe, I have not committed a criminal offence but a civil tort in the same way as do banks when they refuse to pay what is due from them.

Why should banks refuse to pay interest on our money for as long as they hold it ?

The OFT recognises (from the super-complaint consultation) that, during an ISA transfer, the ISA funds are held by one bank or the other at all times. Please tell me why you think that interest should not be paid throughout the transfer process and how the refusal to pay is honest.

jem16

Consumerist wrote: »

Why should banks refuse to pay interest on our money for as long as they hold it ?

They do pay interest whilst holding the money.

The grey area is the time when it leaves the 1st ISA provider and is sent by cheque to the 2nd ISA provider. At this point neither bank effectively has the money - it's in transit. An electronic transfer could get round that so why isn't that used?

The OFT recognises (from the super-complaint consultation) that, during an ISA transfer, the ISA funds are held by one bank or the other at all times.

As has already been said, just because the OFT recognises something doesn't mean there is agreement. The agreement is 2 days at the moment.

Please tell me why you think that interest should not be paid throughout the transfer process and how the refusal to pay is honest.

I would love it to be paid and no interest lost during transfers. However until agreement is reached that says it must, we have to accept that 2 days lost interest can happen. If it's less it's a bonus but not, unfortunately, a right.

Exactly the same thing can happen when you decide to move funds from a non ISA account to another. You might be lucky and can use Faster Payments to transfer between accounts but as we all know there is a limit on how much can go by Faster Payments. If you are over that limit you can use the BACS system which will take 3 working days or the CHAPS system which will incur a charge. Why then do you expect that ISA transfers be any different?

In the meanwhile we have a few choices regarding ISAs;

1. Don't transfer but accept possible lower interest rates.
2. Transfer but be aware that 2 days lost interest might happen.
3. Transfer to an ISA provider that promises it will pay interest from either the date of application or at least the date of leaving the other provider.

Consumerist

jem16 wrote: »

They do pay interest whilst holding the money.

The grey area is the time when it leaves the 1st ISA provider and is sent by cheque to the 2nd ISA provider. At this point neither bank effectively has the money - it's in transit. An electronic transfer could get round that so why isn't that used?

Wrong.

The first bank still has use of the funds until the second bank receives its value from the first (cashes the cheque, if you like).

Consumerist

jem16 wrote: »

As has already been said, just because the OFT recognises something doesn't mean there is agreement. The agreement is 2 days at the moment.

The OFT has explained to the banks, however, that it is expecting them to move towards transfers without loss of interest.

Consumerist

jem16 wrote: »

However until agreement is reached that says it must, we have to accept that 2 days lost interest can happen. If it's less it's a bonus but not, unfortunately, a right.

No we don't have to accept it. It is our right to be paid interest while a bank holds our money unless they tell us beforehand (e.g. current accounts).

If we complain long enough and loudly enough we will not have to let the banks roll over us. If we all do as the OP has done, the practice will cease.

The trouble is, banks have been getting away with daylight robbery for so long that they accept it as their right to do it. Unfortunately, some of their customers have also come to expect it and accept it.

Some of us, however, want an end to it. Sorry you are not one of them.

SnowMan

Well done CitySlicker.

You clearly felt that as a matter of principle that interest should be paid without a gap and used the options available to you to take it forward.

For somebody to accuse you of blackmail is disappointing, given you clearly say you were taking it forward as a matter of principle.

Personally I would like to see the position where all transfers ISAs or otherwise between "instant access" type savings accounts are made without loss of days of interest, that way it is at least a level playing field between institutions. It is hard for a bank that wants to play fair to compete when others are making profits from things like this.

I think the existing system where banks are charged the same fee for successful and unsuccessful complaints by the ombudsman (if I understand the system correctly) does need changing so that those complaints which are upheld in favour of the customer result in a larger fee for the bank and those which are not upheld pay less or nothing. But that possible structural issue is not a reason for someone to suggest that a person who feels strongly about an issue should not take it up with the ombudsman.

The big problem is that, speaking more generally, banks are turning down complaints in the full knowledge that if someone were to take it to the ombudsman the bank would lose. They rely on most of those people then not going to the ombudsman. The percentage of claims that are successful backs this up and a change to the ombudsman fees might help change this. It is also why mentioning to abank that you feel strongly enough to go to the ombudsman does the trick, they realise you are one of the minority who will take it all the way.

Well done again CitySlicker and thanks for sharing your experience.

jem16

Consumerist wrote: »

Wrong.

The first bank still has use of the funds until the second bank receives its value (cashes the cheque, if you like) from the first.

Which is why I said "effectively".

Consumerist wrote: »

The OFT has explained to the banks, however, that it is expecting them to move towards transfers without loss of interest.

My employer expects me to write 66 reports in 40 hours. Unfortunately it's never going to happen but out of goodwill I do them no matter how long it takes. Some however will stop after 40 hours and demand more time.

Consumerist wrote: »

No we don't have to accept it. It is our right to be paid interest while a bank holds our money unless they tell us beforehand (e.g. current accounts).

We don't have to transfer and the bank will pay us interest. ISA transfer rules are also clealry laid out that some loss of interest may occur.

If we complain long enough and loudly enough we will not have to let the banks roll over us. If we all do as the OP has done, the practice will cease.

Yes it may. It may also happen that the banks start to charge for transfers - who knows?

The trouble is, banks have been getting away with daylight robbery for so long that they accept it as their right to do it. Unfortunately, some of their customers have also come to expect it and accept it.

Some of us, however, want an end to it. Sorry you are not one of them.

Please don't put words into my mouth.

I quite clealry said I would love to see interest being paid the whole time. However there is a right and a wrong way of getting it achieved.