Leeds Building Society ISA Mis-sold?

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
12 replies 1.7K views
lizebertlizebert Forumite
24 Posts
edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
I'm after some advice please.

I applied for the Online Bonus ISA offered by Leeds Building Society on 6th April (the day it became available). There was a delay in opening the ISA on the building society side (I received an email saying that due to the high number of applications, there is a delay, but rest assured any interest would be back-dated to the date I opened the ISA) so I didn't actually transfer any funds until a week or so later.

When I applied for the account it was advertised as paying a variable rate of 2.55% AER, including a 1.25% bonus until 30 April 2014, and would allow transfers in.

I have an ISA with another bank consisting of last year's investments which matured last month. I contacted LBS to ask for the relevant form for transferring in, but received an email telling me the "issue" was closed on the 8th April and now will not accept transfers in. I was told to check the terms and conditions. I've checked this, and they say "Further subscriptions in future tax years may be made up to the applicable cash ISA subscription
limit in any tax year and you may transfer in previous years' subscriptions whilst the issue remains
open for further investment". However, at NO POINT was I told that there was any change to the ISA, or that it was now a closed issue.

I've also just realised that the interest rate on my isa is a measly 1.3%. I'm now in the position where I can't open another cash ISA within this tax year (is this correct??) so I'm stuck with two ISAs paying tiny interest rates.

What I can't understand is why they continued with my application after the product was withdrawn. I didn't deposit any funds until several days AFTER 8th April. Should I not have been informed that I was actually opening a different account from what I applied for?

I really feel that I've been mis-sold this ISA, and I want to make a complaint. Do I have a leg to stand on?

Please help!
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Replies

  • jimjamesjimjames Forumite
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    What is the interest rate shown on your paperwork?

    There is no reason why you can't transfer the ISAs to another provider so you aren't "stuck" with keeping them as they are unless you signed up to a fixed term ISA.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • innovateinnovate
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    LBS were quite overwhelmed and got themselves into a bit of a mess with their online ISA.

    The Online ISA has not been withdrawn. You can still apply to it today. Albeit the interest rate you get for new applications now is 1.3%.

    If your ISA was opened in the week of April 6, you should be able to transfer existing ISAs in, and your interest rate should be 2.55% for 12 months from opening. If you have been told differently, raise a formal, written, complaint.

    You were, however, not mis-sold anything. You chose to apply for the account. Nobody forced you to apply. There was nothing wrong with the original offering.

    If you are not happy with the LBS ISA, you can find another ISA provider that allows transfers in and ask them to transfer any new contributions you have made this financial year. Once the transfer is complete, you can then make further contributions up to your current financial year's allowance limit. But read the T&Cs of the new ISA carefully.

    You can probably transfer any other ISAs into the same ISA, or another one you like.
  • dunstonhdunstonh Forumite
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    When you buy online, it is important to note what you buy and the terms as no-one is there telling you. Many ISAs with a limited issue require transfers to be in by a certain date to qualify (often 7-10 days before closing date for that tranche).

    Did it say anything having transfers in by a certain date?

    The ISA subscription and the deal offered would be two different things.

    Can you clarify if you mean your ISA was new money or an ISA transfer as you appear to use the term transfer to suggest two different things?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • lizebertlizebert Forumite
    24 Posts
    dunstonh wrote: »
    When you buy online, it is important to note what you buy and the terms as no-one is there telling you. Many ISAs with a limited issue require transfers to be in by a certain date to qualify (often 7-10 days before closing date for that tranche).

    Did it say anything having transfers in by a certain date?

    The ISA subscription and the deal offered would be two different things.

    Can you clarify if you mean your ISA was new money or an ISA transfer as you appear to use the term transfer to suggest two different things?

    Sorry! It was new money used to open it but I now want to transfer an old isa into it. There were no terms re:transferring in by a certain date. It seems they just changed their minds about what they were offering!
  • innovateinnovate
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    lizebert wrote: »
    Sorry! It was new money used to open it but I now want to transfer an old isa into it. There were no terms re:transferring in by a certain date. It seems they just changed their minds about what they were offering!

    I got one of these ISAs myself, and there has been no change the T&Cs at all since April this year. What happened when you sent them the transfer request form?
  • lizebertlizebert Forumite
    24 Posts
    innovate wrote: »
    I got one of these ISAs myself, and there has been no change the T&Cs at all since April this year. What happened when you sent them the transfer request form?

    I didn't actually send one. Couldn't find it on their website so emailed them and was told I couldn't transfer
  • innovateinnovate
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    Try this: http://www.leedsbuildingsociety.co.uk/savings/pdf/isa_transfer_form.pdf

    I think you have been told porkies, as they are still taking transfers for the current edition of the Online ISA.
  • GreenBitterflyGreenBitterfly Forumite
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    I think I googled Leeds Building Society transfer form, and that's how I found it.
  • lizebertlizebert Forumite
    24 Posts
    innovate wrote: »

    I think you have been told porkies, as they are still taking transfers for the current edition of the Online ISA.

    Thanks, but unless they can honour the original interest rate, my money may as well stay where it is, or be transferred elsewhere!
  • innovateinnovate
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    Sorry, I wasn't meant to suggest they dropped the interest rate on your ISA. It should still be 2.55% - that's what it shows on my Leeds ISA that started in April.
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