ISA transfer not made

Merryb

My bank has acted very badly and been very unhelpful but this is the short story...
I made a transfer from my current account into a new ISA account for 2018/19. The bank stopped the transfer. I phoned them up and told them to go ahead and make the transfer and they said they would. I assumed it would all be OK but just got my statement and it showed it was stopped a second time. I phoned the bank and they said 'oh sorry ask the receiving bank if they will accept a late payment'. I did this but the receiving bank said they couldn't. I told my current account bank they couldn't accept it and I am now waiting for them to get back to me.


When I made the initial complaint the guy did mention some compensation, but I pointed out that as this was an ISA this would have to be ongoing for the rest of my life! Anyone any ideas what the bank might come back with to right their wrong?


Thanks

colsten

You haven't mentioned any dates for the transactions and for the calls you made to the bank, or said how money is involved, or what sort of an ISA it is, or how much compensation they have offered, so it's a bit difficult to comment.

In any case, you would probably need to make a formal, written, complaint to the bank. If they don't respond to your satisfaction within 8 weeks, you can then take the matter to the FOS for a final decision.

You are quite right, in theory they've messed it up for the rest of your life. By how much you have lost out depends a lot on the type of ISA and the amount involved.

Terry_Towelling

Interesting. So your case against your bank is that you could have taken advantage of last year's ISA allowance if this payment had gone in and then added another load of cash from this tax year's ISA allowance - is that right?

I notice you haven't said, how much the payment was and, therefore, we don't know just how much of this year's ISA allowance you have 'lost'.

Ignoring the seeming injustice for the time being, you may find that your bank has T&Cs that state it is not liable for 'losses' if payments fail to go through or are blocked for fraud analysis. On that basis they could offer you nothing.

Your argument that you will be losing out for the rest of your life cannot be substantiated. Can you demonstrate that you have cash to add to your ISA this tax year and that this exceeds the amount of 'lost' allowance? There is no evidence that you will keep the amount in the ISA for the rest of your life. There is no evidence that the ISA rules will remain the same for the rest of your life. There is no way of knowing how long you will live!

On top of those uncertainties it is almost certain you could actually receive more interest by depositing your 'lost' ISA allowance into a non-ISA product. That would limit your lifetime of losses to (perhaps) just the tax you might have to pay on the non-ISA interest (if any). Are you (or would you be) paying tax on your non-ISA interest?

If they do offer you something (which sounds likely) be reasonable because if they do have T&Cs to limit their obligations, you might end up with nothing.

Edit - your thread title is misleading because it suggests this was a failed ISA transfer (in which case you haven't really lost out at all) rather than a payment into an ISA.

colsten

It could be a LISA for all we know, with a £4K deposit, so a £1,000 loss for starters. On the other hand, it could be £500 into an instant access cash ISA, in which case the loss is minute.

masonic

Indeed, the bank might even have inadvertently done the OP a favour if a cash ISA was not the best place for these savings - for example if transferring from a TSB or Nationwide current account paying 5% to a cash ISA paying 1%.