Old Scottish Widows ISA delaying payment of funds

born2bongo

We've got a Scottish Widows Index Tracker ISA, taken out before the days of faster payments and we've recently asked them to liquidate some units and pay the cash into our bank account.

The ISA has only limited internet access but we were able to see the units reduce on Thursday. Since then, we've checked our bank account almost hourly, to no avail.

We've now called them and they are citing the T&Cs (20 years old), saying it takes 3-5 business days to make the payment.

Obviously that is a constraint they are now imposing on us rather than the structural BACS issue it once was. They are clearly going to invest our money on the overnight markets for a full week before allowing us the use of it, and this seems massively unfair in the current climate.

Do others agree with me and is there any recourse with the various regulatory bodies, or are we trapped?

It sounds impatient but there is a deal hanging off this money that we will struggle to hold together if we have to wait till next Thursday

Thanks in advance

bigadaj

Rule is if it's something important then leave enough time.

How much are we talking about, they are almost certainly not under any obligation to use faster payments. You could always ask them to use chaps but there would be a charge.

Archi_Bald

Are they breaking the agreed T&Cs?

PeacefulWaters

This is all about the time it takes them to instigate the payment after selling the units. It's probably in an administrative pile waiting to be be processed.

The payment itself will hit the account in line with legal requirements.

They are clearly going to invest our money on the overnight markets for a full week before allowing us the use of it, and this seems massively unfair in the current climate.

Believe me, this is not a get rich scheme for them. The tiny returns this business approach would make them don't make it worth a deliberate act of delaying payment.

It sounds impatient but there is a deal hanging off this money that we will struggle to hold together if we have to wait till next Thursday

You know that you should have moved earlier, don't you?

born2bongo

I used to work for one of their sister companies. Like all financial institutions they make money gambling client funds on the overnight markets. That's what they are doing with our 10k. The T&Cs quote 3-5 business days because that was the norm on the old BACS system. They are just taking advantage to make some money out of us. It may be legal but it's not moral (but then they are owned by Lloyds bank).

We realise there's not much we can do about it and they seem quite happy for us to transfer the remaining funds out to a more modern account. Probably because our fees are 0.5% and Lloyds increased them to 1% for new customers when they took them over.

Since HSBC has the same type of ISA for 0.17% and the turnaround time is 3 days I guess we need to switch if we can.

dunstonh

Obviously that is a constraint they are now imposing on us rather than the structural BACS issue it once was.

You find most providers will use BACs unless you chose to pay for a CHAPS payment. Faster payments rarely applies.

They are clearly going to invest our money on the overnight markets for a full week before allowing us the use of it, and this seems massively unfair in the current climate.

You do realise that they usually pay you before they get the money as most insurers prefund the settlement period. So, actually it is costing them.

o others agree with me and is there any recourse with the various regulatory bodies, or are we trapped?

No. Your lack of knowledge and understanding is not grounds for complaint. Generally, providers are given up to 30 days to release funds. So, it will be way before that.

Since HSBC has the same type of ISA for 0.17% and the turnaround time is 3 days I guess we need to switch if we can.

Both are likely to be T+2 on settlement. I dont know if HSBC pre-fund. Possibly not given their charges. Although if buying via a platform, it is up to the platform if they prefund or not.

born2bongo

Scottish Widows ISA with a Scottish Widows index tracker. All done in house by computers. Unit Cost sheet determines price.

PeacefulWaters

born2bongo wrote: »

Scottish Widows ISA with a Scottish Widows index tracker. All done in house by computers. Unit Cost sheet determines price.

Thanks for that.