No action on ISA transfer. When should interest be claimed from once sorted?

Nine_Lives

My own ISA transfer from Halifax to Santander has been sorted & all interest settled, but my g/f isn't having such a good time with hers (& she applied for the transfer sooner).

She complained to both Santander & Halifax about the way in which it was being handled (the key note being she applied for a partial transfer & the entire account got shut down).

Halifax said they would look into it on 30th March. The only "activity" since then was a letter from Santander saying it'd been settled at their end, but the money (all of it) remains with Halifax.


My g/f received a new letter today (from Santander)....

I can confirm your transfer request was sent to Halifax on 19/03/2012. This was chased on 30/03/2012 but we have not received the funds.

Your transfer request clearly states you do not wish to close the account & transfer all of your account from Halifax, therefore please contact Halifax with regards to any lost interest.

So Santander say contact Halifax - that's the simple part.

Question is when to claim interest from...?

The money is currently sitting in a Halifax ISA receiving 3.00%. My gf wants to transfer it to her Santander ISA which pays 3.50%.

Should she expect an increased rate of 0.50% from 19th March? 30th March? No right to any of it? When?

AirlieBird

The first thing to say is that Santander, as the receiving bank, is REQUIRED under the agreed industry guidelines to pay interest after 16 working days of you submitting the transfer request irrespective of whether they have received the funds or not.* If Santander want Halifax to compensate them for having to pay interest without having the funds when it was Halifax who messed up should be between them.

As to when, or indeed whether, Halifax should pay for lost interest prior to the 16th working day is a tricky one. I think at best you could claim interest from days 11 (as the last day in the guidelines when they should have processed your request to transfer out) to day 15 (the last day before the new provider must start paying interest).

*http://www.bba.org.uk/consumer-guide-to-cash-isa-transfers
"Your new provider will backdate interest to the first day where interest no longer accrues on the funds being transferred from your old ISA. In addition, your new provider will start paying the new interest rate from day 16 at the latest regardless of whether the transfer has completed within the standard 15 business day timeline"

Nine_Lives

Thanks for that.

So in effect she's basically looking at losing out on a half months interest, but (& legal jargon always baffles me) Santander should pay up from the 16th day.

It's still taking its time. She doesn't get home until quite late, so it's a bit hit/miss as to whether she can make the 8pm deadline to call Halifax during the week. Failing that it'd be the weekend. It's unlikely she'd make it during the week as even if she got home early at 7:30pm or so - that's prime time for these numbers & she'd likely be on hold for 30 minutes before she got through.

Very frustrating that they can't handle something so simple.