Dot ComUnity Credit Union - ISA

FOREVER21

The ghost of Dotcomunity soldiers on! They were a nuisance to us when "alive". and still are.( in the guise of the FSCS)

I have an appointment to see a personal banker at Barclays to-morrow, I will take the cheque together with the statement I received fromDotcom in February showing myISA balance and a copy of a screen shot I took on 13May showing the interest which was added.

Of course this will be £5 less than the amount on the cheque, my options then appear to be:

1 hope they don't notice( unlikely??)
2. Try and spin some tale about the £5 being held in a sought of suspense account linked to the ISA( will they really care about such a small difference.?

With regard to HMRC how will they ever know about the £5 difference?

I will let you know how I get on to-morrow.

masonic

gwapenut wrote: »

On the one hand I feel a little frustrated with NW, but on the other the poor girl listened to my story and my counter-arguments, and couldn't get past the advice she'd been given by the central team. It's certainly not clear cut, and the FSCS does absolutely nothing whatsoever to help us win these arguments apart from say "HMRC said it was alright so all these 1000s of customer service assistants should remember that guidance note for this rarest of rare situations and just do what they're told". Not helpful.

This is very clearly set out in the ISA Guidance Notes:

Subscriptions that do not count towards the annual subscription limits

Defaulted cash account subscription (cash manager in default)
6.51 Where a cash ISA manager is declared in default by either the FCA or the Financial Services Compensation Scheme (FSCS), the investor may make a single defaulted cash account subscription outside of the annual subscription limits to either a cash ISA or a stocks and shares ISA held by that investor. A defaulted cash account subscription can be made whether or not any compensation is paid to the investor.
6.52 The maximum defaulted cash account subscription is the amount held in the cash account immediately before the default (including any accrued interest). If the defaulted cash account subscription made is less than the maximum allowed, the investor cannot make a later defaulted cash account subscription to make up any, or all, of the shortfall.
6.53 The defaulted cash account subscription must be made in a single payment within 180 days of the default occurring. For defaults occurring in the period 6 April 2011 to 7 August 2012, the defaulted cash account subscription must be made by 3 February 2013.

6.54 The investor must give the following information to the ISA manager accepting the defaulted cash account subscription
- the amount held in the defaulted cash account immediately before the default occurred (including accrued interest), and
- where subscriptions were made to the defaulted cash account in the tax year in which the defaulted cash account subscription is being made
- the amount of those subscriptions, and
- the date of the first subscription

For Example
Investor A has a cash ISA with manager X who is declared in default on 30 August 2012 when the account balance (including interest) was £6,250. Investor A can make a single defaulted cash account subscription of up to £6,250 to either a new or existing cash or stocks and shares ISA without it counting towards the ISA subscription limits. He does not have to wait for any compensation if he has other savings available, but if he subscribes less than £6,250 he cannot make a later defaulted cash account subscription to make up any shortfall. The defaulted cash account subscription must be made within 180 days of 30 August 2012. Investor A uses existing savings to make a single subscription of £5,000 with stocks and shares ISA manager Y. He must show manager Y evidence of his account balance with manager X on the date of default (30 August 2012), and provide details of the amount of any subscriptions made to manager X in 2012-13 and the date of the first of those subscriptions. The evidence investor A could show to manager Y might include
- his ISA statement for 2011-12 accompanied by information showing the later monthly payments
- a copy of a passbook
- a letter from FSCS confirming the account balance at the date of default

However:

6.56 There is no requirement for ISA managers to accept defaulted cash account subscriptions.

gwapenut

Thanks masonic, rather than FSCS, for pointing me in the direction of something solid that I can refer Nationwide to!

I accept your point about section 6.56 though ...

Ed-1

Does the FSCS letter accompanying the cheque state the final ISA balance?

FOREVER21

pafpcg wrote: »

We received this morning our cheques from FSCS and the letters from the administrators but with Statements of Account which listed only the Basic Share Account. (My theory is that once the administrators sent the ISA funds to FSCS, the ISA accounts would close automatically leaving only the Basic account in the EBCU system to be displayed on the statement.) Interest had been added to the capital (and from a quick calculation, a little more than the 3% expected for the six months it was deposited!)

We took the cheques, letters and a DotCom Statement from February round to our local Nationwide branch and after a very helpful member of staff spent over an hour on the phone with the ISA section in Nationwide head office, we've each opened new Flexclusive ISAs by transferring-in the cheques. Success!

Is anyone on here now going to start speculating on the financial health of the Nationwide?

Did Nationwide make any comment regarding the £5 difference between the cheque amount and the balance on yourISA balance?

If they did ,how did you explain it?

darren72

I'm concerned about point 6.53 which reads

"6.53 The defaulted cash account subscription must be made in a single payment within 180 days of the default occurring."

Myself (as many others) haven't received the backdated interest payments that were due, and I've been told this will be sent as a separate cheque. However, reading the above it sounds as though the payment needs to be a single deposit.......

Talk about confusing...

gwapenut

FOREVER21 wrote: »

Did Nationwide make any comment regarding the £5 difference between the cheque amount and the balance on yourISA balance?

If they did ,how did you explain it?

I'm thinking it was a £155 difference, which would be even harder to explain away. I'm surprised they let that go, but hoping he got it all back.

thenudeone

MARTYM8` wrote: »

Fine – but if you bank the cheque how do you prove that you are using the same funds later to transfer an ISA your new provider?

You don't need to. You're allowed 180 days to invest the up to the amount you had in the ISA. There is no need to use the actual cheque you were given from the FSCS. If you have a better home for it (eg: a Santander 123 account) you could even keep it there for 5½ months then write a cheque yourself. It would still be valid as an ISA transfer.

BTW Coventry have said they will accept it as an addition to an existing Coventry prior year ISA (Their Instant Access Privilege ISA for existing members pays an extremely competitive 2.5%)

This is an unusual situation so it's understandable that other providers' front line staff don't know what to do. But anyone having difficulty getting a financial institution to accept what, after all, is a legitimate transfer under HMRC rules, should be politely persistent, and start the complaints procedure if they are still being rebuffed.

masonic

darren72 wrote: »

I'm concerned about point 6.53 which reads

"6.53 The defaulted cash account subscription must be made in a single payment within 180 days of the default occurring."

Myself (as many others) haven't received the backdated interest payments that were due, and I've been told this will be sent as a separate cheque. However, reading the above it sounds as though the payment needs to be a single deposit.......

Talk about confusing...

Presumably that interest will be accounted for in your final statement, in which case it won't be a problem - you don't even need to wait for this separate cheque before paying in to a new ISA (HMRC rules above state that "He does not have to wait for any compensation if he has other savings available").

gwapenut

darren72 wrote: »

Myself (as many others) haven't received the backdated interest payments that were due, and I've been told this will be sent as a separate cheque. However, reading the above it sounds as though the payment needs to be a single deposit.......

Did they say they were aware of it for other people, or just those who complained?

Under ISA transfer rules you can pay transfer part of an ISA. I think the single payment just means you can pay as much of the original balance as you like, but once and once only. It won't matter if a little bit of interest is omitted.