Money went missing transferring from CTF to Junior ISA

HeatherK45

I am a bit lost at the moment and not sure what to do next.
My son had a Child Trust Fund with Police Mutual. I applied with NS&I back in July to open a Junior ISA for him and transfer over the CTF. The last letter I had from NS&I was August saying it would take 15 working days to transfer it over. I still hadn't heard anything back and no money in new account. So phoned Police Mutual (who answered straight away) and couldn't find the CTF so account must have been closed. I then waited 40 minutes to get through to NS&I who are saying the money never reached them. Something about they tried to pay it over by direct debit (£1766.76 which wasn't even the right amount in CTF). Payment declined and sent back on 23rd October to an account number and saying something about sale declined by retail logic which makes no sense at all.
 Phoned back Police Mutual who confirmed that the account was closed on 28th October and payment sent by BACS on 3rd September. 
So the money is missing? I am now back on hold to NS&I again but not quite sure where to go from here.

HeatherK45

HeatherK45 said:

I am a bit lost at the moment and not sure what to do next.
My son had a Child Trust Fund with Police Mutual. I applied with NS&I back in July to open a Junior ISA for him and transfer over the CTF. The last letter I had from NS&I was August saying it would take 15 working days to transfer it over. I still hadn't heard anything back and no money in new account. So phoned Police Mutual (who answered straight away) and couldn't find the CTF so account must have been closed. I then waited 40 minutes to get through to NS&I who are saying the money never reached them. Something about they tried to pay it over by direct debit (£1766.76 which wasn't even the right amount in CTF). Payment declined and sent back on 23rd October to an account number and saying something about sale declined by retail logic which makes no sense at all.
 Phoned back Police Mutual who confirmed that the account was closed on 28th October and payment sent by BACS on 3rd September. 
So the money is missing? I am now back on hold to NS&I again but not quite sure where to go from here.

I also emailed NS&I on 6th October and had no reply.

Alexland

As the gaining provider NS&I are responsible for performing the transfer and working with the old provider to resolve any errors that may have occurred. It would seem that Police Mutual are reasonably on top of their paperwork so I would be inclined to believe any details they have provided you. Don't worry the money will be safe just taking a long time to get resolved.

NS&I are well known on this forum and in the media to have absolutely terrible customer service this year with extended delays in doing tasks related to transfers properly (and probably even longer to not do things properly then resolve them). Sadly the issue needs to be pursued with NS&I as your shiny new provider however painful and consider raising a formal complaint with them too.

Good Luck, Alex

Mousesack

Alexland said:

As the gaining provider NS&I are responsible for performing the transfer and working with the old provider to resolve any errors that may have occurred.

Alexland, can you point me to a source for this idea that the responsibility lies with the gaining provider, please?

I have been dealing with a similar problem over the last few months; I have been trying to transfer a Junior ISA from a different provider to NS&I. The difficulties started when the original provider closed the account and issued NS&I with a cheque via the mail, but NS&I said they didn't receive the cheque. After many phonecalls I was able to get NS&I to issue a "chaser letter" to the other provider, but it subsequently transpired that this letter was never received. In my more recent phonecalls with NS&I have been receiving conflicting information and so, out of frustration, I have requested for the transfer to be cancelled. The original funder have said that the original account won't be reopened but they will open a new account in its place. They have also said that no interest will have been accrued on the funds in this account during the lengthy period in which the funds were lost in the void. I will be looking to seek compensation, but it has been difficult as each provider is blaming the other. If, as you say, the gaining provider has the responsibility, then that would be really very helpful as I will be able to pursue the compensation from them.

If you have any other advice, I'd be very grateful for it.

Alexland

Mousesack said:

If, as you say, the gaining provider has the responsibility, then that would be really very helpful as I will be able to pursue the compensation from them.

I didn't say the new provider was responsible to the extent that they could be held liable for the failure of the old ISA manager as that wouldn't be fair. The problem you are having with cheques and letters getting lost in the post is that it may be impossible to determine if they were lost before sending (or never produced), lost by Royal Mail or lost after receipt so the liability is unclear. Either way the new provider would be managing your transfer application to them and should be providing the customer service on it even if that means things need to be sent again if enough time has passed to suggest they have been lost.

If you have now cancelled the transfer and decided to stay with the old provider I don't understand why they wouldn't continue to pay you a rate of interest (although standard rates are extremely low possibly zero) as the money never left them because the cheque was never cashed by the new provider?

Mousesack

Alexland said:

If you have now cancelled the transfer and decided to stay with the old provider I don't understand why they wouldn't continue to pay you a rate of interest (although standard rates are extremely low possibly zero) as the money never left them because the cheque was never cashed by the new provider?

Thanks for the reply! Yes, this was my thinking as well. Before reading your previous post, I had been thinking about asking the original provider for the interest that would have been accrued during this period had the funds remained in the original account, because they in fact still had the funds during this time even if the account had been closed. And I was thinking about pursuing NS&I for the further lost interest -- the interest that the funds would have accrued in the NS&I account had this been opened in a timely manner, minus the interest that would have been accrued in the account with the original provider.
More generally, it seems like there are very clear guidelines that these funds need to be transferred within 15 working days, but I am at a loss to see who to turn to in order to make sure that these guidelines are enforced. The ombudsman seems like the most obvious candidate, but that seems like a very lengthy process, that requires a specific complaint be lodged (and as we've seen, it's not easy to pinpoint where the fault lies here, which is why I was interested to hear your point about the responsibility lying with the gaining provider). I'd honestly considered phoning the police, if only because they might be able to point me in the right direction. Or maybe it's a matter for my MP? (The 15 days limit is quoted on the UK GOV website, which makes me think this is a matter of law rather than just customer care.)

Alexland

Honestly for items lost in the post I doubt you will ever get enough evidence that either provider was financially liable for the delay however I do think you might now have a case for the old provider to pay some interest at their standard rate (even if it's close to zero) as even if the account was closed they still had the money in their bank account as the cheque was never cashed.

Mousesack

Thanks for your help on this, much appreciated!

HeatherK45

An update on my problem, looks like I am not the only one.
I managed to get someone at NS&I on the 4th who basically said the money was transferred but just not attached to my son's account. So it was sitting in the nether basically. They said that happens if the previous provider doesn't fill in some form. Trying to get through on the phone as that has been 7 working days and money still not in my son's account. No answer and lines busy. I am seriously thinking about taking my daughter's money and moving it elsewhere but don't want to do that until my son's is sorted.

HeatherK45

Alexland said:

As the gaining provider NS&I are responsible for performing the transfer and working with the old provider to resolve any errors that may have occurred. It would seem that Police Mutual are reasonably on top of their paperwork so I would be inclined to believe any details they have provided you. Don't worry the money will be safe just taking a long time to get resolved.

NS&I are well known on this forum and in the media to have absolutely terrible customer service this year with extended delays in doing tasks related to transfers properly (and probably even longer to not do things properly then resolve them). Sadly the issue needs to be pursued with NS&I as your shiny new provider however painful and consider raising a formal complaint with them too.

Good Luck, Alex

How would I raise a formal complaint when they haven't replied to my original complaint email?