Virgin ISA Conundrum

inspectorperez

I'd be intrigued to get some comments from ISA experts on my recent experience with Virgin Money.

My 5 year Cash ISA with Virgin was due to mature on 24 October. The total amount was circa £68K.

At the beginning of October, Newcastle B.Soc introduced a 2 year Cash ISA offering 4.1%. Shortly after, the Virgin maturity options became available in my online portal, none of which were as attractive as the Newcastle offering.

I applied for the Newcastle product on the basis that I wanted a transfer in from Virgin of £65K as I planned to release £3K into my own cash flow. I sent a secure message to Virgin explaining that they would be receiving a transfer in request from Newcastle for the balance of £65K after I had extracted £3K, all to take place at the maturity date.

Newcastle duly opened up the appropriate account, requested funds from Virgin to take place on the maturity date.

24 October arrived and Virgin transferred my 5 year matured fix into an easy access flexible account, same day. I then withdrew my planned £3K and waited for the transfer to Newcastle to be completed.

A week passed and nothing happened. On Friday 4 November I sent a secure message to Newcastle asking for a status report. Late in the day, I received a response stating that Virgin had rejected the request "due to an account balance change........"

I am totally mystified and cannot get to the bottom of what the problem is/was. Contact by telephone is a PIA and the secure communication process is a slow laborious procedure so do not expect to receive explanations from either Newcastle or Virgin anytime soon.

Suffice to say, Virgin have now got a 2 year offering of 4.36% and I have this morning transferred the old matured ISA in to the new one (Issue 534), but am confused and annoyed tbh that I have been unable to achieve what I had originally planned to do.

As I say at the beginning of my rambling post, really would appreciate any helpful comments.

masonic

I'm a little surprised that the money ever found its way into an easy access account - I would have expected it to disappear at maturity and move directly to Newcastle. However, it is expected that a change to the balance would reset an ISA transfer because the old ISA manager must provide to the new ISA manager details of the ISA to be transferred including its value for the new ISA manager to agree to accept, ahead of the transfer date. Therefore if the balance changes from what was expected on the transfer date, and the customer has specified a transfer date that can then no longer be met, a new application may be required.

It's not clear exactly what you authorised, but it seems like you requested a full transfer under the assumption that you'd remove the £3k yourself prior to it taking place. The way to achieve this without the issues would be to request a partial transfer of a specified amount (e.g. £65,000).

inspectorperez

masonic said:

I'm a little surprised that the money ever found its way into an easy access account - I would have expected it to disappear at maturity and move directly to Newcastle. However, it is expected that a change to the balance would reset an ISA transfer because the old ISA manager must provide to the new ISA manager details of the ISA to be transferred including its value for the new ISA manager to agree to accept, ahead of the transfer date. Therefore if the balance changes from what was expected on the transfer date, and the customer has specified a transfer date that can then no longer be met, a new application may be required.

It's not clear exactly what you authorised, but it seems like you requested a full transfer under the assumption that you'd remove the £3k yourself prior to it taking place. The way to achieve this without the issues would be to request a partial transfer of a specified amount (e.g. £65,000).

That makes absolute sense.

As I mentioned in my post, I did explain to Virgin what my intentions were by means of secure message prior to the maturity date.

Unfortunately the options within the Virgin portal did not include the option I wanted and there was no option to elaborate by means of freeform narrative.

masonic

Virgin is not at liberty to deviate from the details contained within the transfer authority form from Newcastle. The transfer form is in a standardised format used across all ISA managers (of which there are hundreds) so that it can be valid for a transfer between any pair of registered ISA managers. It is therefore only possible to specify instructions from among the options provided on the transfer form. The ceding ISA manager (Virgin in this case) plays no part in accepting transfer instructions, these should always be provided to the gaining ISA manager (Newcastle in this case). That said, even Newcastle would be unable to accept an elaboration such as 'leave £3,000 and transfer the rest'. Virgin could have provided you with advanced notice of the final balance, from which you could have deducted your £3k and specified an exact amount for a partial transfer.

inspectorperez

Thanks Masonic. I understand what you are saying.

I think the lesson I have learned from this experience is that in future when other ISA's are due to mature, I will make arrangements to complete any applications in branch (if there are such things at the time) to ensure there are no misunderstandings or unnecesary complications.

At the end of the day the resulting delays in the process have worked to my advantage in obtaining a superior rate of interest, but I am still not sure how my online attempt could have been done any differently given the parameters of the online procedure. Previous transfers I have undertaken online have been successful and I will just have to write this one off as "tried hard but not good enough"..

xylophone

but I am still not sure how my online attempt could have been done any differently given the parameters of the online procedure. 

Unless you are requesting a full transfer, you specify the exact amount to be transferred on the form submitted to the  transferee (provider accepting transfer).

And if the form provided by the transferee permits you to insert only sort code/account number OR roll number of transferor (ceding provider), make sure that you check the ceding provider's T&C to check which is correct from their point of view.

inspectorperez

xylophone said:

but I am still not sure how my online attempt could have been done any differently given the parameters of the online procedure. 

Unless you are requesting a full transfer, you specify the exact amount to be transferred on the form submitted to the  transferee (provider accepting transfer).

And if the form provided by the transferee permits you to insert only sort code/account number OR roll number of transferor (ceding provider), make sure that you check the ceding provider's T&C to check which ia correct from their point of view.

I hear what you say and thanks for the bold font to underscore your words.

I would just comment that I am a retired accountant who worked in practice for over 40 years, so I am not entirely dumb in such matters and would have expected myself to navigate the paper trail successfully!

xylophone

I would just comment that I am a retired accountant who worked in practice for over 40 years, so I am not entirely dumb in such matters and would have expected myself to navigate the paper trail successfully!

I've done numerous transfers over the years but recently fell foul of the process.....

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