Halifax Fixed Rate ISA Saver - no cooling-off period

Dagobert

I phoned the Halifax three times to obtain information about their fixed rate ISA. The first two times I asked them to send out their T&Cs but each time I received a set of glossy brochures about all sorts of products instead - nothing about ISAs in particular.

When I phoned the third time it was explained to me that
- I could sign up over the phone (or go to a branch)
- they do not send out T&Cs until a customer has signed up
- the fixed rate ISA has no cooling-off period
- that the T&Cs are sent out after the money has been deposited

As I was incredulous, the advisor explained the above procedure to me several times. In other words: if you sign up over the phone, the contract is completed once the application is signed and the money paid in. Then they send out the T&Cs.

Is this legal? I thought anything bought over the phone entitles the consumer to a cooling-off period?

System

I tried looking on their website but it didn't go into any depth for the T & C. Do you know if to get the 5.7% you have to take it over 5 years or can you get that rate for 1 year. I was looking at the Abbey 5.5% for my 16 year old daughter as that rate is better than the 5.01% gross she gets on her Nationwide Smart account but if the Halifax is offering 5.7% for 1 year I might get her to go there instead.

Kazza242

Pam17 - If you opt for a shorter term Halifax fixed rate ISA, then the rate of interest they pay is considerably less:

1 Year 4.85%
2 Years 4.90%
3 Years 4.95%
4 Years 5.00%
5 Years 5.70%

Here's the link to the rates written above.

Dagobert - Don't take that nonsense from Halifax. No customer should be expected to sign up for a product before having had a chance to read the terms and conditions they must adhere to. I'm pretty sure that the Banking Code states that financial institutions must make the terms and conditions of their products clear and understandable. If they have a website then they must make the terms and conditions of the products they are offering available via the web site.

Halifax should certainly have sent you a copy of the terms and conditions of the account before asking you to commit to it. I'm pretty sure that on the declaration part of the application form (that you must sign) it states that you have read and understood the terms and conditions of the account. Could you pop into a Halifax branch and request a printed copy of the terms and conditions? Perhaps, you might be lucky enough to speak to a branch employee who knows what he/she is talking about. If they still won't give you a copy of the terms and conditions, then frankly I wouldn't bother with them if I were you and take your business elsewhere.

Edited to add: Dagobert - Ask Halifax to send you a fixed rate ISA application pack. The application pack should include a terms and conditions sheet. Don't sign up to anything until you've read, understood and are happy with the terms and conditions set out.

deemy2004

Yeh the only one worth doing is the 5.7% and the halifax are a pain in the butt !

Took about 8 weeks, and umpteen calls to get the ISA's transferred to them back in Nov. but all interest WAS backdated including that the rate given was 5.8%

Dagobert

Kazza242,
Thank you for your advice. I had already decided against the Halifax ISA and my posting was purely to clarify whether their practices are legal. The advisor quite clearly explained to me that there are only two ways of applying: a) over the phone b) go to your branch. So, no application pack sent out. In fact, she said "If we sent out the T&Cs to everyone who asked we'd be sending dozens for every day of the week without gettng an appplication." Maybe she was just trying to push a sale.

Pam17, they only updated their site recently. When I looked at it last it was still 5.8% (although the interest had dropped to 5.7% by Nov04). I am not even sure whether the old page made it cear that the 5.8% applied to 5yrs only.

Dagobert

Here's the reply from their complaints department:

There is no 'cooling off' period with the fixed rate ISA account. The account does not comply with government CAT standards (you cannot make un-penalised withdrawals) nor is it a credit facility so we do not have to have one. It is correct that the funds have to be in the account before we sent out the terms and conditions document for you to sign and return to us.

Placing funds in the account does not commit you to the product; it only guarantees that you will receive the applicable rate on that date. If when you receive the terms and conditions you are unhappy then you can refuse to return the signed document. At the point we have to close the account downand return the funds.

I find it simply outrageous that one is supposed to transfer the funds before having seen the T&Cs.

deemy2004

On opening, I got NO specific T&C's ! So I still don't know exactly what Ive got ... :rolleyes:

Still 5 years at 5.8% was worth the mad dash... since at that time other rates had been tumbling for some 6 weeks... fast...

Dagobert

One of the crucial points to know about an ISA is whether you can move the money to another ISA provider at the end of the term and whether they charge for this transfer (as, for instance, A&L does). Depending on the answer to this, 5.8% might not be all that good after all.

OK, you can pull out without penalty if you don't like the T&Cs once you get them. But towards the end of the tax year they have you over a barrel.

Once you have received the T&Cs, could you post them here? It would be interesting to see what the reason for all this secrecy might be.

dealseeker

deemy2004 wrote:

Yeh the only one worth doing is the 5.7% and the halifax are a pain in the butt !

Took about 8 weeks, and umpteen calls to get the ISA's transferred to them back in Nov. but all interest WAS backdated including that the rate given was 5.8%

Had similar problem in November. They gave me compensation as delays meant I didn't get the 5.8%. In fact they used my calculation and then rounded up by an extra £30 so got my tax free interest difference (betweeen 5.8% and 5.7%) plus compensation after about 3 weeks instead of 5 years!

Part of my complaint was around the ludicrous terms and conditions and the blatantly incorrect application forms e.g. I was transferring in but the form stated that I could not subscribe to another ISA in that tax year and I was not comfortable signing forms that were simply wrong...

Top marks on how my complaint was handled.

Still glad I did ..