Bank paid out my ISA to my partner, by mistake & without permission.

johndoeface

Hey MSE,

I'm actually posting this on behalf of my Mum and her partner, I will explain the scenario as best as I can: please tell me if you need more information or if I've posted in the wrong place, I'm a noobie here!

My Mum's partner, 'Joe' for simplicity, received some of his pension a couple of years ago in a lump sum, and he gave half of it to my Mum. My Mum and 'Joe' both put their halves of the lump sum in two separate, and personal, Cash ISA's where it remained for the past year and six months.

My Mum had to cash in her ISA at the end of January to pay off her, and her partner's, credit card debts. She went to the bank and requested to cash in her ISA, and was surprised to find out she had instant access to the money: it was then transferred into a joint account.

'Joe' has just been to the bank today to withdraw his Cash ISA in order to pay off some more debt and was shocked to find he had no money, his ISA had been emptied. This was disturbing as he had never touched the money, though thought it may have been his error. The bank manager just giggled at Joe's situation and emphasised how he could not be given information on my Mum's ISA account: though they are very open with their finances/etc.

It wasn't until the drive home from the bank that he remember my Mum had withdrawn her ISA earlier in the year. He went back to the bank and confronted the manager again, and questioned where the money had been transferred from the ISA account. It had been transferred into a joint account which is only used by my Mother.

When my Mother went into the bank in January and requested to withdraw her ISA, they withdrew Joe's instead and put that into the joint account.

My Mother was blissfully unaware and luckily for Joe, they are still a couple/together: for if their relationship had ended and the bank had paid his money to the wrong person..?

I don't know what to make of the situation, on one hand the bank won't let Joe know about my Mother's account yet they are willing to let my Mother withdraw his money, in cash!

Joe is currently in the middle of a long running PPI claim with the same bank: who claim to have no record of his PPI payments or his accounts with them. They offered him approx £125 , or some other pittance, when he had been paying these PPI payments for probably longer than a decade. Whilst I'm not sure on the figures I'm sure the amount he actually paid over that time was over £10k, so a serious amount. Needless to say he could never have claimed the PPI as his work/union covered the eventuality of him not being able to work due to health. Again, needless to say, the banks have been as difficult as possible throughout the process.

He was absolutely terrified about what had happened to that money as they were relying on it to pay debts. Both him and my Mother work tooth and nail for everything they have and it's not like they had other money they could have fallen back on if the money had disappeared.

Just to clarify: my Mum requested to withdraw her ISA and produced her card for the joint account the money went into.

The ISA accounts were in two completely individual accounts and neither one of them had authorisation to access the other.

Any advice on the situation would be greatly appreciated.

I think Joe and my Mum would like to know what exactly have the bank done wrong? Is it legally wrong? Are they entitled to compensation, or would it give them leverage in the PPI claim? As well as anything else you'd like to add, point out.

We are also in Scotland if that is relevant.

mulronie

The bank will have procedures for complaints - follow them and escalate it to the Financial Ombudsman Service if you remain unhappy.

By the way, this is completely separate to the PPI issue and it should stay that way; don't even mention the ongoing PPI case in the complaint.

johndoeface

Why keep them separate though, will the bank's mishandling of their finances not provide some sort of leverage?

Shaolin_Monkey

johndoeface wrote: »

Why keep them separate though, will the bank's mishandling of their finances not provide some sort of leverage?

Leverage with whom? I think the Ombudsman would treat them as entirely separate cases as they are separate issues. It is very concerning if your mother walked into the bank and withdrew her partners ISA, and this was not picked up. It suggests basic security checks at the bank were lacking. But has there actually been a financial loss as a result? Has it actually (rather than potentially) cost your mother or 'joe' anything? If they were to put the situation right, what would you have them do?

jimjames

johndoeface wrote: »

Why keep them separate though, will the bank's mishandling of their finances not provide some sort of leverage?

They are completely separate issues so should be kept that way. There is no relationship between the PPI case and the ISA issue.

Re the PPI surely "Joe" has some record of what he paid if he still has credit card debts? There are far too many speculative claims for PPI that have no basis in reality so he has to find some evidence to prove what he paid them.

atush

the best you can (and should do) is file a formal complaint. The bank broke the law and it's own rules and checks by giving your mother 'joe's ' ISA cash. So, ask for compensation.

However, don't expect a large amt of compensation as in this case, there was no 'loss' unless Joe's ISA paid a higher rate of interest than your mothers.

I suppose, technically they might have to pay the money back to Joe, but as it went into an acct that was joint (ie he is an acct holder) then I can't see this happening as he technically had access to the money.

xylophone

there was no 'loss' unless Joe's ISA paid a higher rate of interest than your mothers.

This seems to me irrelevant.
"Joe" had an ISA.
"Mary" had an ISA.

Only Mary had the right to access her account.
Only Joe had the right to access his.

The bank has allowed Mary to access and indeed close another person's account.

This is a gross error.

Joe should make a formal complaint. He should not drag in the question of PPI as this is not germane to this issue.

pqrdef

So if your mother went to the bank to close her own ISA, how did they connect her with Joe's ISA?

The fact that she shares an address and a joint account with Joe wouldn't make the connection.

Sounds to me like this is a passbook account and she took the wrong passbook.

In that case, I wouldn't push the bank too hard, or they might say that your mother committed fraud.

Not sure the bank did anything wrong. Possession of a passbook would normally be taken as sufficient ID, especially as the money wasn't paid out in cash, but only moved to another account in the same name. That's what passbooks are for - account holders are responsible for keeping their passbooks in their own possession.

atush

I fail to see if an acct passbook was involved or not, but it doesn't really matter. I also don't see it as fraud by mary as she asked for HER isa to be closed, not Joe's.

ID should have been checked. Was for me last time i closed an acct in my sole name.

Quote:
there was no 'loss' unless Joe's ISA paid a higher rate of interest than your mothers.
This seems to me irrelevant.
"Joe" had an ISA.
"Mary" had an ISA.

I see it only relevant in the compensation stage to prove a 'loss'. It is not relevant to the fact the bank made a Gross error as you say.

OP, do let us know what happens when Joe files his complaint.

johndoeface

pqrdef wrote: »

So if your mother went to the bank to close her own ISA, how did they connect her with Joe's ISA?

The fact that she shares an address and a joint account with Joe wouldn't make the connection.

Sounds to me like this is a passbook account and she took the wrong passbook.

In that case, I wouldn't push the bank too hard, or they might say that your mother committed fraud.

Not sure the bank did anything wrong. Possession of a passbook would normally be taken as sufficient ID, especially as the money wasn't paid out in cash, but only moved to another account in the same name. That's what passbooks are for - account holders are responsible for keeping their passbooks in their own possession.

She was in doing some other banking - and enquired about withdrawing her ISA, she doesn't have access to Joe's ISA and Joe does not have access to her's: proven by the fact that the bank wouldn't give him any information about her ISA even after they had paid his out to my Mum. She was surprised at the fact she could have instant access to her money.

She never committed fraud as she had her bank card and requested to withdraw her ISA. The bank never checked any more details, I can only assume that they found Joe's ISA as he is linked to the joint account they share. There is no passbook involved either, as I said it is a Cash ISA account.

In response to it going into a "Joint" account that he had access to: it also went into an account that my Mother had access to. It was gone before Joe even knew it was in there: used to pay their joint debts, thankfully.

I am a Computing student and as such have a reasonable understanding of the Data Protection act and it seems grossly negligent in my understanding, regardless of the fact that a large sum of money was put into the hands of, in this case, an unrelated party.

I appreciate the fact that these are separate incidents, PPI and this incident, though as most of you can probably understand Joe and my Mum are a bit bitter as a result of the PPI situation. They are willing to bend the bank over anyway possible. Though I'll advise them to keep the incidents separate, they are likely to pursue this as far as possible.

Thanks very much for all of the genuine responses, I'll keep you all posted!

johndoeface

Shaolin_Monkey wrote: »

Leverage with whom? I think the Ombudsman would treat them as entirely separate cases as they are separate issues. It is very concerning if your mother walked into the bank and withdrew her partners ISA, and this was not picked up. It suggests basic security checks at the bank were lacking. But has there actually been a financial loss as a result? Has it actually (rather than potentially) cost your mother or 'joe' anything? If they were to put the situation right, what would you have them do?

I would personally take the banks for anything I could. I think my Mum and Joe would have them compensate them for their gross negligence and the stressed caused to Joe?

There may not be a financial loss, which is lucky for them. If they were further across the red line or had split up: what would have happened to Joe and the credit card debts etc he was hoping to pay off yesterday?