Incorrect ISA advice given by bank.

kungfuman

Not sure if this is the right forum but here goes: In May 2011 I had built up some savings whichI thought would be better off in an ISA so I opened one with the Bank ofScotland and utilised my full ISA allowance straightaway. The following April(2012), the interest earned was added into the account and I went into my localbranch to query if I need to do anything with the ISA. I was informed that I didn’t have to doanything with the ISA (switch products, review rate, etc) and I could add in mynew allowance for the year. I added myfull years allowance into the account pretty much straightaway. However, I still wasn’t 100% convinced that Icould just leave the ISA without switching to another rate/product so I phonedtheir savings account services number to make sure of which the operatorinformed me that I don’t do anything with the account and it would just keeprolling on.



So to the present and another year has passed but I noticethat no interest earned has been added into the account. I queried this with my local branch and lowand behold I am now told that because my first years ISA had ‘matured’ afterthe first year, I should of changed to another ISA product that they had on atthe time. I’m pretty miffed with this asI have effective lost a year’s interest on 2 years ISA allowance due toincorrect information the bank’s employees have told me. I voiced my dissatisfaction in my localbranch and all they basically said they can’t do anything about it and wouldarrange an appointments to review my accounts for the coming year. I will be using this time to complain aboutthe service I’ve received but I’m wondering if anyone here can advise anythingelse I should be doing. Should I bepressing them to recompensate me for my loss in interest?

dunstonh

Normally, you do not need to do anything with ISAs after putting them in there. However, a fixed term deposit does need something to be done on maturity.

When you got your maturity notice, what action did you take?
Did you let the individual know it was a fixed term deposit ISA? (if they didnt check and you didnt tell them, then they wouldnt know)

Do you have any evidence to support your side of events?

No answers to your question yet but if you can answer my questions, it will help us give you opinions.

Lokolo

OK I am a little bit confused.

You didn't get any interest because you chose not to do anything. The bank isn't there to hold you hand. You asked the bank whether you needed to move the ISA elsewhere and their answer is correct, you don't. You can leave it where it is for eternity. Doesn't mean it's always going to earn interest.

The bank hasn't done anything wrong.

kungfuman

dunstonh wrote: »

Normally, you do not need to do anything with ISAs after putting them in there. However, a fixed term deposit does need something to be done on maturity.

When you got your maturity notice, what action did you take?
Did you let the individual know it was a fixed term deposit ISA? (if they didnt check and you didnt tell them, then they wouldnt know)

Do you have any evidence to support your side of events?

No answers to your question yet but if you can answer my questions, it will help us give you opinions.

I do recall getting a letter through (although I can;t remeber the exact details) about the ISA about 1 month before the full year which prompted my visit into the bank to query what needs to be done.

I don't have any evidence as such except that immediately after my full year term, I added my full years 'new' allowance into the account. My call to the savings account line was a couple months after this point, of which they would of seen two years ISA allowance in the account.

Lokolo, my decision not to do anything was based on the advice the bank provided me. If I knew I had to move it to restart another fixed rate period, then I would of. I did make it clear at the time I would be using my next years allowance as soon as I can. I don't expect the bank to 'hold my hand' but I do expect them to be knowledgeable about the products and services they have offered to me.

Freecall

As with referenda, it's all in the question.

Q. Do I need to do anything with my ISA (to keep the benefits of an ISA)?

A. No.

Q. Do I need to do anything with my cash deposit (to maximize my returns)?

A. Yes

QED

psychic_teabag

So you opened the account in May '11 and added more in April '12.

You've not said whether it was a fixed-term or instant-access account. It would be a bit surprising that you could add more to a fixed term account near the end of its term, so perhaps it was an instant-access account. The fact that interest was added in April '12 might also suggest it was instant-access - I'd have expected a 1-year fixed-term account to add the interest on maturity. That may not be so strong, though.

If it was instant-access with a 1-year bonus, then it's true that, in April '12, nothing needed to be done since it was presumably still earning a decent rate. The account may have changed in May '12 on the anniversary of opening - either fixed-term matured, or instant-access bonus expired.

Ah - in your followup post, you say you asked a couple of months later - June '12 ? In that case, while it's true that nothing had to be done to the account to maintain ISA status, something should have been done to get a better rate. Maybe it all depends on the exact words that were used in the call.

rb10

kungfuman wrote: »

I do recall getting a letter through (although I can;t remeber the exact details) about the ISA about 1 month before the full year which prompted my visit into the bank to query what needs to be done.

The letter will have said that your account is due to mature, and the interest rate will drop on XX date.

It will have given you options of what action you could take - i.e. different accounts that you could switch to.

BOS were absolutely correct in telling you that there was no need to do anything to your ISA after a year.

The best thing you can do is to phone them up now and ask them to transfer it onto a better rate. Or check the Top Cash ISAs thread for another account paying a high interest rate.

innovate

kungfuman made many mistakes there, the main one being relying on a bank to offer the best alternative. As always, they only offer what suits them best. Nothing unusual there - - if you go into the Coop and ask for the price of a tin of beans, they will give you what suits them best. Not necessarily the cheapest beans, not necessarily the best quality beans, and most certainly not the best deal for beans available across all the supermarkets and local shops. Just what suits them best on the day.

As with so many complaints on here, it's yet again a case of somebody not assuming responsibility for their own financial affairs.

dunstonh wrote: »

Normally, you do not need to do anything with ISAs after putting them in there.

That's actually very much not true for cash ISAs. Almost all of them need to be transferred (using the formal transfer process) to elsewhere after a period of time - - - one year for many instant access ones, and one or more years for fixed term ones.

It's also not true that you normally do not need to do anything with S&S ISAs. As you know, you have to make sure that your investment stays balanced. But lets not confuse the issue, the OP clearly was talking about a cash ISA so it's no help to them if we rabbit on about S&S.

dunstonh

That's actually very much not true for cash ISAs. Almost all of them need to be transferred (using the formal transfer process) to elsewhere after a period of time - - - one year for many instant access ones, and one or more years for fixed term ones.

I disagree on that. Whilst it is desirable due to bonus rates etc, technically, you need not do anything.

What you need to do and what you should do are two different things. The OP is complaining about what you need to do. Not what you should do.

jimjames

dunstonh wrote: »

I disagree on that. Whilst it is desirable due to bonus rates etc, technically, you need not do anything.

What you need to do and what you should do are two different things. The OP is complaining about what you need to do. Not what you should do.

Exactly. If you ask the wrong question you can't complain if the answer wasn't what you wanted.

As hopefully is very clear to the OP now, you do not NEED to do anything with a cash ISA once you have taken it out. It will remain tax free and with ISA status indefinitely without any further action required.

What it won't do is earn the best interest rate and maximise your return unless you transfer it to different accounts.

If the question had been, "Which account should I move this ISA to in order to get the best rates?" then they should have told you - but again only the account within their own range. Beyond that you need to do your own research to find the best rate each year which may be with a different bank.

Alternatively you could go for an account with a lower starting rate but one that doesn't drop after 12 months.

honizz

I hate to agree partly with Dunstonh because he let me down in the past but -

I know that if you have a standard cash ISA, you do NOT need to keep fiddling with it, it will go on until someone tells you that it stops.
If you want to change it every now and then to get a better return that is up to you but if left alone it will still earn interest tax free. This is absolute, no getting away from it - do not argue with this..

Next the person went to the Bank to ask if they needed to do anything. The Bank said no. The Bank were wrong the customer needed to do something. Most people who work in banks don't understand ISA rules, I have had at least 6 occasions over the years where I have had conflicting advice from bank staff. I sat down with a financial adviser in a bank once and even he had to reread a leaflet to confirm what I had been telling him for 10 minutes...

I am looking at my bank interest rates now and there is one product that pays no interest - the Current account. So if you go to a bank asking if you need to do anything with a maturing ISA or course you should get the right advice.

My advice is go to the bank and find the person (s) who told you this, get them to sort it. If they can't sort it ask for the manager, if they can't sort it, ask for the chief execs name and address and send a letter explaining everything that happened.

the outcome will be that the Bank will sort this out for you.

I am sorry you received such idiotic answers from the rest of these people answering your query. You had the right to receive the right advice when you went in the bank, there is no question about whether you were asking the wrong question at all. The ISA was maturing, you wanted to know if anything needed to be done, why would you ask that if you didn't want to know the answer??

good luck

H