Post Office doesn't honour its fixed term rate of interest

Devonsaver

When I applied for a one year fixed rate Online Isa with the Post Office, the interest rate on the application form was 1.3% (best rate recommended by this site).  This was a transfer from an ISA with another provider and it took a couple of weeks for the Post Office to get the transfer moneys. When I looked online, it said that the money was in a holding account (paying a pittance of interest) and even if I tried to open a new product at that point the interest rate was less than the 1.3%. I have queried this  and after waiting 6 weeks  (and 2 unsatisfactory telephone calls) I got a very vague unsatisfactory reply and now I note that there is something in the small print to say that by the time your account is up and running what you originally chose may not be available. (For a variable rate perhaps, but surely not for a fixed rate)

 It is interesting to note that I had a similar issue recently with Cynergy bank and when I phoned, they corrected the interest rate without hesitating to what I had applied for. Well done Cynergy. Shame on you Post Office.
Surely the Post Office can't act in this way and it must be against FCA rules?  

Thrugelmir

Fixed rate accounts normally specify a time frame in which the funds have to be deposited. Perfectly reasonable. 

K9

Devonsaver said:

When I applied for a one year fixed rate Online Isa with the Post Office, the interest rate on the application form was 1.3% (best rate recommended by this site).  This was a transfer from an ISA with another provider and it took a couple of weeks for the Post Office to get the transfer moneys. When I looked online, it said that the money was in a holding account (paying a pittance of interest) and even if I tried to open a new product at that point the interest rate was less than the 1.3%. I have queried this  and after waiting 6 weeks  (and 2 unsatisfactory telephone calls) I got a very vague unsatisfactory reply and now I note that there is something in the small print to say that by the time your account is up and running what you originally chose may not be available. (For a variable rate perhaps, but surely not for a fixed rate)

 It is interesting to note that I had a similar issue recently with Cynergy bank and when I phoned, they corrected the interest rate without hesitating to what I had applied for. Well done Cynergy. Shame on you Post Office.
Surely the Post Office can't act in this way and it must be against FCA rules?  

If it's in the small print, I guess that they have probably covered their backs.
I agree it doesn't seem 'correct' but you may find that it is 'lawful'.
You could always refer it to the Financial Ombudsman if he still exists (I'm new here and finding my way around)!

NorthernJoe

Small print or big print, it doesn't make a difference 

Devonsaver

Thrugelmir said:

Fixed rate accounts normally specify a time frame in which the funds have to be deposited. Perfectly reasonable. 

Yes I agree if it is the individual transferring money. But this was an ISA transfer that the providers have to sort out among themselves, so the Post office asks the other provider for the money. And I made the application on 23 April and the money was transferred on the 12 May.  And there is nothing in their literature about a time frame.

Don't you think it is wrong that they advertise at one rate (without saying in the advert or the first page of the application where you choose you product, you apply at that rate and then they don't honour it. Do you know if there are any rules about this or not?

eskbanker

Devonsaver said:

When I applied for a one year fixed rate Online Isa with the Post Office, the interest rate on the application form was 1.3% (best rate recommended by this site).

Devonsaver said:

Don't you think it is wrong that they advertise at one rate (without saying in the advert or the first page of the application where you choose you product, you apply at that rate and then they don't honour it. Do you know if there are any rules about this or not?

The current published terms state that:

The fixed rate you receive will be the rate on offer for the term you select on the date your application is received or, if you apply at a Post Office branch, the date you hand your application in

so the change wouldn't appear to be related to ISA transfer delays, but presumably reflect the rate being reduced while you were in the process of applying?

SFindlay

Devonsaver said:

and now I note that there is something in the small print to say that by the time your account is up and running what you originally chose may not be available. 

There is no such thing as "small print" !! If you fail to read the terms and conditions associated with the account that's your problem not theirs!! 

tomla

eskbanker said:

Devonsaver said:

When I applied for a one year fixed rate Online Isa with the Post Office, the interest rate on the application form was 1.3% (best rate recommended by this site).

Devonsaver said:

Don't you think it is wrong that they advertise at one rate (without saying in the advert or the first page of the application where you choose you product, you apply at that rate and then they don't honour it. Do you know if there are any rules about this or not?

The current published terms state that:

The fixed rate you receive will be the rate on offer for the term you select on the date your application is received or, if you apply at a Post Office branch, the date you hand your application in

so the change wouldn't appear to be related to ISA transfer delays, but presumably reflect the rate being reduced while you were in the process of applying?

It's that application date that matters....despite what was on your application form...on the day you applied what was the rate, surely the PO can confirm that.
Ignore self righteous posts about small print from others..it's a very good description of the terms and conditions and you are not suggesting you didn't read them (as the poster obviously didn't care to read your post), just that the terms aren't clear on timing issues.

eskbanker

tomla said:
It's that application date that matters....despite what was on your application form...on the day you applied what was the rate, surely the PO can confirm that.

Just to reiterate, it's the date of receipt of application, rather than the date of application as such, i.e. it's when they opened the posted form, not the date it was completed or posted.  Any rate mentioned on the application form could be well out of date by the time the application is actually received, especially given the delays in postal services at the time (yes, I get the irony!).

soulsaver

If what you say is accurate regarding the rate being stated on the application, I believe the grounds for your complaint should be that, whilst the application was a request for a transfer of ISA funds for a 1.3% account, the PO continued with the transfer even though the rate had been w/d.
I believe the FOS would say:
a) PO should have come back to you in a timely manner to say 1.3% is no longer available,  and offer other options including aborting the transfer.
b) Or PO should transfer the funds to the account you applied for at 1.3%, even if it had been w/d in the interim. 

Devonsaver

Thank you Soulsaver and Eskbanker. It was an online application and I am still trying to get them to send me a copy of the application form . I know I ticked the fixed rate 1.3% one year box, but looking into it further it seems that once my account was opened (same day as application form) with a "holding account" I should have then redone the application for the 1.3%. Very, very strange system. I thought I had already done it and therefore didn't need to do again, but there we are. It is going to take forever for them to give me a decent answer ( I had already waited 6 weeks) , so I think best just to move the money elsewhere.