Possible no interest paid during maturity rollover 14 day cooling off period

bristolleedsfan

UBL UK, 5 year maturity letter enclosed current fixed term rates. whether chose to re-invest or auto reinvestment get prevailing rates applicable at time of maturity which might be different to rates shown with maturity letter.

Maturity letter stated have 14 days from time of re-investment of funds in case wish to withdraw funds without any charges, any withdrawals after 14 day period will be subject to early withdrawal charges.

Reasonable expectation I believe that interest would be paid during 14 day cooling off period.

I had two fixed rates maturing with them on 23 April, larger fixed rate I gave instructions 3 weeks earlier to new provider, UBL UK transferred funds out on 23 April - 

Maturity letter stated if do not receive instructions before Maturity Date - auto reinvestment at prevailing rate

Thursday 20th I sent UBLUK secure message stating I intended on 21st to instruct YBS to transfer ISA, opened YBS account on 20th, 21st was earliest I could complete ISA transfer form.

Friday 21st UBL UK confirmed by secure message it had received ISA transfer request from YBS, asked me if I wanted to cancel the other ISA transfer out request and have all ISA x 2 funds sent to YBS, I confirmed for them to do what I had intended, 2 separate ISA fixed rates being transferred out separately


Today by post received confirmation of rollover which states they do not pay interest for days that funds have been with them if withdraw during 14 days, this was not mentioned within maturity letter, as of now transfer of funds to YBS has not taken place.

I welcome comments and opinions. on above point.

masonic

I agree, it would be reasonable to expect interest to accrue from the date the money is credited to the account, and if cancelling "without any charges", that interest should be applied upon closure. In general, when cancelling a product under distance selling regulations, you'd expect to get the benefits of the product for the time you had it and the provider would be entitled to charge you for the cost of the services provided during the period you held the product. Financial services are exempt from cooling off legislation, but had you taken out a loan or overdraft, for example, I doubt this would have been given to you interest free if you had cancelled. UBL UK could have specified up front that interest would not be payable on a cancelled product. If they did not, then I think it would be open to challenge.

eskbanker

The product information page at https://www.ubluk.com/personal-banking/products-and-services/personal-savings-accounts/fixed-rate-cash-isa/ confirms:

There is a 14 day cooling off period for all Fixed Rate Cash ISAs. If you decide to cancel within14 days of funding the Account, UBL UK will not deduct Early Withdrawal Charges, but you will not be entitled to interest payments for the number of days the deposit has been held with UBL UK.

bristolleedsfan

eskbanker said:

The product information page at https://www.ubluk.com/personal-banking/products-and-services/personal-savings-accounts/fixed-rate-cash-isa/ confirms:

There is a 14 day cooling off period for all Fixed Rate Cash ISAs. If you decide to cancel within14 days of funding the Account, UBL UK will not deduct Early Withdrawal Charges, but you will not be entitled to interest payments for the number of days the deposit has been held with UBL UK.

I would appreciate any opinion/comment you might have related to this being maturity auto re-investment 14 day cooling off period with no mention within maturity letter of no interest being paid if withdraw/transfer out during that period, also UBL UK did receive transfer out instructions before maturity date from YBS.

eskbanker

bristolleedsfan said:

eskbanker said:

The product information page at https://www.ubluk.com/personal-banking/products-and-services/personal-savings-accounts/fixed-rate-cash-isa/ confirms:

There is a 14 day cooling off period for all Fixed Rate Cash ISAs. If you decide to cancel within14 days of funding the Account, UBL UK will not deduct Early Withdrawal Charges, but you will not be entitled to interest payments for the number of days the deposit has been held with UBL UK.

I would appreciate any opinion/comment you might have related to this being maturity auto re-investment 14 day cooling off period with no mention within maturity letter of no interest being paid if withdraw/transfer out during that period, also UBL UK did receive transfer out instructions before maturity date from YBS.

Maturity letters obviously can't include all product Ts & Cs, but did it actually address what would happen if they received a transfer request prior to maturity and in particular how the period between maturity and transfer would work (i.e. in what sort of account would funds reside during that time, etc)?  Cash ISA transfers can take up to three weeks, so the fact that UBL confirmed receipt of an instruction on the last working day prior to maturity didn't commit them to instantly processing that, but it would be normal for funds to be eligible for interest on every day before, during and after a transfer.

tightauldgit

Exercising a cooling off period is cancelling the contract and generally the requirement would be for them to put you back in the position you were in before entering the contract. So you get your funds back but no interest payments. 

bristolleedsfan

eskbanker said:

bristolleedsfan said:

eskbanker said:

The product information page at https://www.ubluk.com/personal-banking/products-and-services/personal-savings-accounts/fixed-rate-cash-isa/ confirms:

There is a 14 day cooling off period for all Fixed Rate Cash ISAs. If you decide to cancel within14 days of funding the Account, UBL UK will not deduct Early Withdrawal Charges, but you will not be entitled to interest payments for the number of days the deposit has been held with UBL UK.

I would appreciate any opinion/comment you might have related to this being maturity auto re-investment 14 day cooling off period with no mention within maturity letter of no interest being paid if withdraw/transfer out during that period, also UBL UK did receive transfer out instructions before maturity date from YBS.

Maturity letters obviously can't include all product Ts & Cs, but did it actually address what would happen if they received a transfer request prior to maturity and in particular how the period between maturity and transfer would work (i.e. in what sort of account would funds reside during that time, etc)?  Cash ISA transfers can take up to three weeks, so the fact that UBL confirmed receipt of an instruction on the last working day prior to maturity didn't commit them to instantly processing that, but it would be normal for funds to be eligible for interest on every day before, during and after a transfer.

Maturity letter and confirmation of deposit rollover letter ( received by post today) only referred to withdrawing of funds, no mention of transfer out instructions etc.

Deposit rollover letter stated no interest for the days funds have been with them if withdraw during 14 day cooling off period.

masonic

tightauldgit said:

Exercising a cooling off period is cancelling the contract and generally the requirement would be for them to put you back in the position you were in before entering the contract. So you get your funds back but no interest payments. 

They are not required to have a cooling off period. Many accounts do not. Of those that do, it seems more common that they will return the money with interest and without penalty. I just picked two providers at random to check (Santander and Nationwide), and both do pay interest up to cancellation. So the requirement and what is the case generally are going to be quite different.

As there is no requirement to have a cooling off period, if one is offered, it is on the terms specified by the provider. The only issue I would have in this case is that it is not without early withdrawal charges if interest is forfeit. If that statement in the maturity letter was made without the qualification that interest would not be paid (as set out in the product features), then it could be viewed as somewhat misleading.

masonic

bristolleedsfan said:

Maturity letter stated if do not receive instructions before Maturity Date - auto reinvestment at prevailing rate

Did you have the option for the ISA to mature into an easy access ISA?

bristolleedsfan said:

eskbanker said:

bristolleedsfan said:

eskbanker said:

The product information page at https://www.ubluk.com/personal-banking/products-and-services/personal-savings-accounts/fixed-rate-cash-isa/ confirms:

There is a 14 day cooling off period for all Fixed Rate Cash ISAs. If you decide to cancel within14 days of funding the Account, UBL UK will not deduct Early Withdrawal Charges, but you will not be entitled to interest payments for the number of days the deposit has been held with UBL UK.

I would appreciate any opinion/comment you might have related to this being maturity auto re-investment 14 day cooling off period with no mention within maturity letter of no interest being paid if withdraw/transfer out during that period, also UBL UK did receive transfer out instructions before maturity date from YBS.

Maturity letters obviously can't include all product Ts & Cs, but did it actually address what would happen if they received a transfer request prior to maturity and in particular how the period between maturity and transfer would work (i.e. in what sort of account would funds reside during that time, etc)?  Cash ISA transfers can take up to three weeks, so the fact that UBL confirmed receipt of an instruction on the last working day prior to maturity didn't commit them to instantly processing that, but it would be normal for funds to be eligible for interest on every day before, during and after a transfer.

Maturity letter and confirmation of deposit rollover letter ( received by post today) only referred to withdrawing of funds, no mention of transfer out instructions etc.

Deposit rollover letter stated no interest for the days funds have been with them if withdraw during 14 day cooling off period.

Exactly what did the maturity letter say about the cooling off period?

bristolleedsfan

masonic said:

bristolleedsfan said:

Maturity letter stated if do not receive instructions before Maturity Date - auto reinvestment at prevailing rate

Did you have the option for the ISA to mature into an easy access ISA?

bristolleedsfan said:

eskbanker said:

bristolleedsfan said:

eskbanker said:

The product information page at https://www.ubluk.com/personal-banking/products-and-services/personal-savings-accounts/fixed-rate-cash-isa/ confirms:

There is a 14 day cooling off period for all Fixed Rate Cash ISAs. If you decide to cancel within14 days of funding the Account, UBL UK will not deduct Early Withdrawal Charges, but you will not be entitled to interest payments for the number of days the deposit has been held with UBL UK.

I would appreciate any opinion/comment you might have related to this being maturity auto re-investment 14 day cooling off period with no mention within maturity letter of no interest being paid if withdraw/transfer out during that period, also UBL UK did receive transfer out instructions before maturity date from YBS.

Maturity letters obviously can't include all product Ts & Cs, but did it actually address what would happen if they received a transfer request prior to maturity and in particular how the period between maturity and transfer would work (i.e. in what sort of account would funds reside during that time, etc)?  Cash ISA transfers can take up to three weeks, so the fact that UBL confirmed receipt of an instruction on the last working day prior to maturity didn't commit them to instantly processing that, but it would be normal for funds to be eligible for interest on every day before, during and after a transfer.

Maturity letter and confirmation of deposit rollover letter ( received by post today) only referred to withdrawing of funds, no mention of transfer out instructions etc.

Deposit rollover letter stated no interest for the days funds have been with them if withdraw during 14 day cooling off period.

Exactly what did the maturity letter say about the cooling off period?

UBL UK do not offer instant access ISA

M/L " You will have 14 days from the date of reinvestment of your funds in case you wish to withdraw money without any charges, Any withdrawals after 14 day grace period will be subject to early withdrawal charges which may effect your original invested abount. For more info please refer to our fixed rate cash ISA T+C

Significance of them receiving notification from YBS of transfer request prior to maturity is  "Maturity letter stated if do not receive instructions before Maturity Date - auto reinvestment at prevailing interest rate as at date of maturity"

masonic

bristolleedsfan said:

masonic said:

bristolleedsfan said:

Maturity letter stated if do not receive instructions before Maturity Date - auto reinvestment at prevailing rate

Did you have the option for the ISA to mature into an easy access ISA?

bristolleedsfan said:

eskbanker said:

bristolleedsfan said:

eskbanker said:

The product information page at https://www.ubluk.com/personal-banking/products-and-services/personal-savings-accounts/fixed-rate-cash-isa/ confirms:

There is a 14 day cooling off period for all Fixed Rate Cash ISAs. If you decide to cancel within14 days of funding the Account, UBL UK will not deduct Early Withdrawal Charges, but you will not be entitled to interest payments for the number of days the deposit has been held with UBL UK.

I would appreciate any opinion/comment you might have related to this being maturity auto re-investment 14 day cooling off period with no mention within maturity letter of no interest being paid if withdraw/transfer out during that period, also UBL UK did receive transfer out instructions before maturity date from YBS.

Maturity letters obviously can't include all product Ts & Cs, but did it actually address what would happen if they received a transfer request prior to maturity and in particular how the period between maturity and transfer would work (i.e. in what sort of account would funds reside during that time, etc)?  Cash ISA transfers can take up to three weeks, so the fact that UBL confirmed receipt of an instruction on the last working day prior to maturity didn't commit them to instantly processing that, but it would be normal for funds to be eligible for interest on every day before, during and after a transfer.

Maturity letter and confirmation of deposit rollover letter ( received by post today) only referred to withdrawing of funds, no mention of transfer out instructions etc.

Deposit rollover letter stated no interest for the days funds have been with them if withdraw during 14 day cooling off period.

Exactly what did the maturity letter say about the cooling off period?

UBL UK do not offer instant access ISA

M/L " You will have 14 days from the date of reinvestment of your funds in case you wish to withdraw money without any charges, Any withdrawals after 14 day grace period will be subject to early withdrawal charges which may effect your original invested abount. For more info please refer to our fixed rate cash ISA T+C

Significance of them receiving notification from YBS of transfer request prior to maturity is  "Maturity letter stated if do not receive instructions before Maturity Date - auto reinvestment at prevailing interest rate as at date of maturity"

Although they do refer you to the T&C for more information, I think you could still object to "without any charges", as they have effectively charged you the accrued interest to cancel. When the penalty is ordinarily a sum equivalent to X days interest, then "without any charges" should surely be when all interest is paid unless otherwise indicated.

The timing of the transfer request could be relevant if they included transfer out as a maturity option, and the transfer request was received within the timescale stipulated for this option.

bristolleedsfan said:

masonic said:

tightauldgit said:

Exercising a cooling off period is cancelling the contract and generally the requirement would be for them to put you back in the position you were in before entering the contract. So you get your funds back but no interest payments. 

They are not required to have a cooling off period. Many accounts do not. Of those that do, it seems more common that they will return the money with interest and without penalty.

Cash ISA has 14 day cooling off period requirement https://www.handbook.fca.org.uk/handbook/COBS/15/2.html

Well that cash ISA special case is news to me, so tightauldgit was right after all. HMRC suggests cancellation is optional at https://www.gov.uk/guidance/how-to-open-an-isa-as-an-isa-manager#cancellation

COBS15.4 outlines how cancellation should be carried out and that "The firm must, without any undue delay and no later than within 30 calendar days, return to the consumer any sums it has received from him..." making no mention of interest. So any attempt to argue they must pay accrued interest is dead in the water. All you have is a lack of clarity in the letter you received.

If you were to take the position that either your message to them informing them of the incoming transfer request, or receipt of the same, should have been taken as notification of cancellation under COBS15.2, then they'd be entitled to stop paying you interest from that date anyway, so I wouldn't go with this argument and stick with misleading nature of the letter you received.