Advice on compensation claim for delayed ISA transfer

SMcGill

I raised a complaint with my bank as they have not transferred a small cash ISA I have with them to a stocks and shares ISA I set up with another provider. It’s not fully resolved as the ISA still hasn’t been transferred but the complaints investigator has agreed that it is the bank’s fault and they have already paid me a small compensation. 

They also said that I should let them know how much gain, if any, I missed out on through their error and they will consider reimbursing me. I know the fund and I’ll know the date it is finally opened but I can’t figure out what date to say it should have been opened if everything had gone smoothly. I can ask the new provider what date they first sent the transfer request, but I can’t be sure how long should it have taken my bank to process.

So my question is whether anyone here has been through something similar and how did you calculate the gain that you lost?

eskbanker

https://www.gov.uk/individual-savings-accounts/transferring-your-isa states:

ISA transfers should take no longer than:

• 15 working days for transfers between cash ISAs
• 30 calendar days for other types of transfer

so work on the basis that if all had gone to plan, you should have been invested 30 days after starting.

ratechaser

eskbanker said:

https://www.gov.uk/individual-savings-accounts/transferring-your-isa states:

ISA transfers should take no longer than:

• 15 working days for transfers between cash ISAs
• 30 calendar days for other types of transfer

so work on the basis that if all had gone to plan, you should have been invested 30 days after starting.

Just to play devils advocate here, what's to stop the OP picking a fund that has rocketed in value in the last 30 days and saying that's the one they would have invested in if the transfer had come through?

Not saying they would do that of course...

eskbanker

ratechaser said:

eskbanker said:

https://www.gov.uk/individual-savings-accounts/transferring-your-isa states:

ISA transfers should take no longer than:

• 15 working days for transfers between cash ISAs
• 30 calendar days for other types of transfer

so work on the basis that if all had gone to plan, you should have been invested 30 days after starting.

Just to play devils advocate here, what's to stop the OP picking a fund that has rocketed in value in the last 30 days and saying that's the one they would have invested in if the transfer had come through?

Not saying they would do that of course...

Agreed - they'd be reliant on OP's good faith in this, although if I was in their shoes I'd be expecting to see some evidence of the investment once made, so if OP was minded to fool them then this would involve either some forgery or an extra purchase and sale.  When all is said and done, it's "a small cash ISA" being transferred so I doubt there's a major gain to be made from some deception!

And it's not the last (or any) 30 day period as such that's relevant here, it's the period from initiation plus 30 days up to the eventual purchase date, which could be significantly more (or less) than 30 days....

SMcGill

Thanks. Yes, the ISA is only £10k and I have evidence that I applied to open a specific s&s ISA

I signed the transfer authorisation on 18th Jan. I don’t know how soon the new provider sent it onto my bank but let’s say two weeks, so at some point in Feb it should’ve moved over. I think it’s unlikely to actually be set up much before mid May.

Reimbursement of any gains I missed because of my bank’s error would be welcome. Not as welcome as having had it all done correctly in the first place, but it’s a close second!

Novice_investor101

Your bank’s complaint handlers should be asking your s&s isa provider to provide them with the funds you had told them to invest the cash in on receipt of the transfer. They’d then calculate how many days delay they caused (using their normal timescales with no errors) & do a loss assessment to see if you’ve lost out financially due to the late transfer & investment. 

Sometimes these show you’ve actually gained from the mistake or sometimes they show you lost. If that’s the case, they should send the s&s isa provider the value of the calculated loss to put you back in the correct position. You normally have to instruct the investment of that extra cash once it arrives with the s&s isa. 

If you gained from it, you just keep that. 

Separately, they should make a compensation payment to you directly to acknowledge any distress & inconvenience they have caused (if any). That would be calculated based on FOS guides. 

SMcGill

Thanks for your advice. And yes, they’ve already paid me £100 for the inconvenience caused.