Bank made incorrect transfer fom ISA

pollyanna76

I visited my Bank and asked them to transfer £3000 from my Current A/C to my ISA A/C, however on checking my balance a few days later, they had transferred £3000 OUT of my ISA into my Current A/C. I spoke to a member of the customer service team who admitted it was their error, but once the money had been taken out of an ISA it could not be replaced. One sum of £3000 has now been transferred to my ISA, but of course, it is still £3000 short of what I had intended it to be.

I would appreciate any advice, whether it is possible for the Bank to put this right as it was their mistake.
Many thanks for any help.
Polly

masonic

If they've admitted making a mistake then, yes, they should put it right. They certainly should have it in their capacity to simply 'undo' the incorrect transfer.

Gordon_the_Moron

I don't know if they can undo it but if they can't I would complain very loudly and ask they compensate the loss of interest.

MarkyMarkD

The HMRC guidance states that ISA/PEP managers (which should include a bank in the case of a mini cash ISA) can correct mistakes of this nature. It specifically refers to the case where a bank mis-interprets a customer's instruction and withdraws money from their ISA in error.

Look here: http://www.hmrc.gov.uk/isa/isagn.pdf and section 10.31 (use "find" to find that section).

If your bank is being stupid about it, refer them to this guidance.

The guidance is explicit that you mustn't have spent the money in the interim! In other words, if you had £3k transferred to your current account in error, your current account balance must have exceeded £3k from the point of the error until the time when the error was reversed - which point you haven't reached yet.

pollyanna76

Many thanks to everyone for the help, especially for the HMRC site. I actually rang the HMRC ISA Helpline yesterday and was told the transfer could not be reversed, so much for their help !!

MarkyMarkD

Do let us know what the bank say.

Indispensable_Hobbes

A letter to the MD I feel is required gross neglegence!

LisaT186

When I worked in a bank I was always told that transactions like this could not be reversed. It alwasy ended up with a calculation of lost interest, less what could be earnt in a savings account net. The point of argument was always how long would the client have kept the money in the ISA as you have lost that particular £3000 ISA allowance for ever. If you can prove several years of savings then the compensation will be higher, as you can demonstrate you are a saver. If its the first or second year of investment then usually it was one year of interest!

Indispensable_Hobbes

Fact is though, it shouldn't matter how long the money would have stayed there, it should still be there but due to an error it isn't any more and that should be rectified.

Only in a perfect world would everything be that simple.

Gordon_the_Moron

MarkyMarkD wrote: »

The HMRC guidance states that ISA/PEP managers (which should include a bank in the case of a mini cash ISA) can correct mistakes of this nature. It specifically refers to the case where a bank mis-interprets a customer's instruction and withdraws money from their ISA in error.

Look here: http://www.hmrc.gov.uk/isa/isagn.pdf and section 10.31 (use "find" to find that section).

If your bank is being stupid about it, refer them to this guidance.

The guidance is explicit that you mustn't have spent the money in the interim! In other words, if you had £3k transferred to your current account in error, your current account balance must have exceeded £3k from the point of the error until the time when the error was reversed - which point you haven't reached yet.

So if the £3k is paid into an account that is already £5k overdrawn and makes it £2k overdrawn what happens? Can they still do the reverse transfer as long as the account stayed £2k or less overdrawn?

Can the mistake be rectified by the bank if it was the customer that made the mistake?

Just curious since I didn't know these sort of mistakes could be rectified.

Da Moron

masonic

Gordon_the_Moron wrote: »

So if the £3k is paid into an account that is already £5k overdrawn and makes it £2k overdrawn what happens? Can they still do the reverse transfer as long as the account stayed £2k or less overdrawn?

According to those notes, the balance (positive or negative) must not fall below the value it was at when the money was deposited. So if it took the account up to being £2k overdrawn, then it would have to stay £2k or less overdrawn. I does seem to imply, however, that if you happened to have a direct debit or standing order go out before you noticed (or had time to act), it could throw a spanner in the works.