Building society took £4000 out of ISA without permission

jamesd

HazDan wrote: »

I mean as a first time property owner it is hard to put any money in from now on

So it's fair to say that you won't be putting much money in a new cash ISA this tax year or next, so the allowances for those years can be used to get this money into an ISA this year and/or next?

cheerfulcat

HazDan wrote: »

Hi

This is what I needed to hear. I will write to the BS to explain what I want. I just want them to recognise that what they have offered is not enough as they have affected my long term financial plan on savings. I mean as a first time property owner it is hard to put any money in from now on and I had used as little of my ISA for the house buy as it was my 'nest egg'. I don't want £1000's of compensation but a bit more than what they are offering as it their mistake.

If you look at the FOS newsletter here, you will see that any compensation has previously been based on the tax you would not have paid had you had the ISA, not the interest you lost out on, and that the Ombudsman seems to take the view that for a basic rate taxpayer the loss isn't that great.

"
[FONT=Verdana, Arial, Helvetica, sans-serif] complaints involving tax allowances[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif] The failure of firms to carry out customer’s instructions in connection with the end of a tax year is a regular cause for complaint. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif] It can be extremely difficult to establish the amount of redress firms should pay when customers lose tax allowances as a result of a firm’s failure to act on instructions. Each case needs to be looked at on its own merits and, once a firm’s liability has been established, conciliation is often required to establish an appropriate level of redress and settle the dispute. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif] It is worth noting that, for basic rate taxpayers, the loss of these allowances is not normally as significant a matter – in cash terms – as they expect. For higher-rate taxpayers, however, the position can be very different. In view of the timing of this edition of ombudsman news, we hope that the following case studies may be particularly helpful. "[/FONT]


[FONT=Verdana, Arial, Helvetica, sans-serif]This newsletter is five years old and the views may have changed, of course.
[/FONT]

MarkyMarkD

If a financial institution takes money out of your ISA and it's their error, they CAN reinstate it. The Inland Revenue guidance is very clear about this.

The only reason they cannot do so is if they transfer the money to (say) your current account and you go off and spend it.

If (say) they transferred £4,000 out of your ISA into your current account, and your current account has been over £4,000 ever since (because obviously you didn't intend to spend the ISA money and didn't ask for it to be transferred) then it CAN be reversed. If they tell you otherwise, they are wrong.

You shouldn't need compensation, you need putting back into the correct position i.e. your ISA reinstating.

By the way, what led to them removing this £4,000 from your ISA, and where did the money go?

$nake_eye$

So which bs was it?

HazDan

Hi
I'm told that they can not reinstate it because of the inland revenue. If there is a way they can then I need to know where it says that (which guidance??).

The short version of the story is I transfered money from different accounts (closing some down because they were emptied) and the smallest possible amount from my ISA. I transfered it to my current account so that all the money would be together and the counter cheque was written out. I failed to notice what that they had taken it from my ISA not my cuurent account. I was in the middle of a house move and sorting out the solictor was the priority. When I did realise that it was still in my current account I called the help line to tell them that they had not taken the money from my account. They weren't interested!!!!!!! it wasn't their problem!!! I mistakedly thought it had come from someone else's and the mistake would catch up eventually despite trying to sort it out. It wasn't til i called the branch manager myself that she identified the problem. She thought it odd that I hadn't come forward before, but then said she couldn't reinstate it although I had managed to put some back in. But i was restricted becaause you can only put £3000 in a year.

MarkyMarkD wrote: »

If a financial institution takes money out of your ISA and it's their error, they CAN reinstate it. The Inland Revenue guidance is very clear about this.

The only reason they cannot do so is if they transfer the money to (say) your current account and you go off and spend it.

If (say) they transferred £4,000 out of your ISA into your current account, and your current account has been over £4,000 ever since (because obviously you didn't intend to spend the ISA money and didn't ask for it to be transferred) then it CAN be reversed. If they tell you otherwise, they are wrong.

You shouldn't need compensation, you need putting back into the correct position i.e. your ISA reinstating.

By the way, what led to them removing this £4,000 from your ISA, and where did the money go?

masonic

HazDan wrote: »

Hi
I'm told that they can not reinstate it because of the inland revenue. If there is a way they can then I need to know where it says that (which guidance??).

See this post for details. Go on, quote it at them.

BWZN93

Sorry to tell you, but it is your error. This is why you are told at the counter to check the details on the paperwork and sign it. I have seen many an error like this in my day, and more often that not it is the customers fault for not checking the paperwork. Would you sign a contract without reading it? No of course not. Would you sign a legal document stating that the sky is green and the stars are made of diamonds without reading it? Again no. You have to check to make doubly sure that the transaction in front of you is EXACTLY as you wanted - mis-communication can happen if you arent very clear and check everything. The cashiers arent offended when you check these things before they are transacted.

Sorry if this is not what you wanted to hear, but it is your responsibility to ensure that you are signing for something you agree too.

Jo x

jamesd

What did the paperwork say about which account the money was to come from?

masonic

Maybe I'm going blind, but I can't see where the OP alluded to anything being put in writing.

MarkyMarkD

I think that Jamesd is assuming that the OP completed some sort of withdrawal document which would have stated how much was to be drawn and from which account.

If it was a verbal instruction, then I can't see how the bank can prove it was NOT its mistake; if they can demonstrate to the Inland Revenue that they didn't have authority to withdraw the money from the ISA account, then I don't see why they wouldn't allow the reinstatement of the ISA if the money had not been spent.

But, because the money was taken as a counter cheque and then used for a purchase, the money was spent and nothing can be done under the IR guidelines.

Like I said the first time (and thanks, masonic, for finding my other post quoting the guidelines) you can only get your ISA funds reinstated if they have not been touched - which I would say means they must have been transferred to another account where they have stayed.

Any transaction which involves converting ISA funds into cash or equivalent would seem likely to be irreversible.

Slightly by the way, but if you were intending to take the money from your current account, why did you need a counter cheque? If you'd written your OWN cheque, the mistake wouldn't have arisen. Maybe it was precisely this point which confused the bank staff?