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

masonic

bristolleedsfan said:

masonic said:

eskbanker said:

Fair enough, I agree with the second paragraph, i.e. I think it's tenable to assert that interest forfeiture not being mentioned is unfair, but still wouldn't go as far as claiming that it shouldn't apply simply because of that!

I'm not suggesting that either. Just that there could be a valid complaint. In considering that, what could the OP have done differently if this had been mentioned? Not much I'd venture, unless the difference in rate was marginal and it may have been better staying put. But it would be an opportunity for UBL to make this letter clearer for others, and perhaps worth a few quid by way of apology for the confusion. Another relevant factor is when YBS will apply interest.

Had maturity letter stated no interest during 14 day cooling off period if transfer out, I would have initiated transfer out 3 weeks earlier being as was not even offered a guaranteed rate for another 5 years.

"Another relevant factor is when YBS will apply interest"

Yes my understanding is supposed to be no loss of interest during ISA transfers, however I cannot see YBS backdating interest to cover loss during cooling off period.

Based on what you have said, you submitted the transfer request to YBS before the maturity of your prior UBL fix, so the cooling off period started after the transfer had been initiated. In this scenario I'd have thought there would be a chance YBS would cover the lost interest.

bristolleedsfan

tightauldgit 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. 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.

I don't see that the maturity letter has any relevance. Exercising the cooling off period hits rewind to before you invested and the contract never existed. The terms of the contract don't have any relevance because you cancelled the contract. That's my understanding of what a cooling off period is.

Most ISA providers that I have looked at do pay interest during 14 day cooling off period.

14 day cooling off period during ISA transfer is also a little different, consumer has no control over when funds are moved out of account.

isasmurf

masonic said:

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

The wording is not particularly clear in the HMRC guidance but 'may' is used not because cancellation is optional but because the provider has a choice how to provide cancellation rights. They can either provide cancellation rights once the ISA has started or instead of this provide a pre-contract right to not go ahead with the ISA, which if offered means the ISA cannot start until the pre-contract right has expired. This is allowed for in BCOBS. 

eskbanker

bristolleedsfan said:
I have got two choices kick can down the road for 5 years by cancelling ISA transfer and accept 4% AER..  I had to take issue with UBL UK 5 years ago after they seemed to have dim view of apparent fact that no interest should be lost during ISA transfer in, they did rectify matters with a hump,

Or - 

Make issue with UBL UK regarding  then only informing me after matured ISA had rolled over that they do not pay interest during 14 day cooling off period if in there words withdraw, + issue of them only referring to withdraw the funds within maturity letter and subsequent rollover letter.

Seems to me that the best thing for you to do is to focus on where the best place is for your money for the next five years, if that's the term you have in mind - you could choose to embark on a big argument with UBL about what you feel are significant omissions in their maturity letters but if the net effect of that is just a week's missed interest then chances are that'll be heavily outweighed by committing to an inferior fixed account for the next 260 weeks, so I'd have thought that concentrating on the bigger picture is a more productive avenue?

bristolleedsfan

eskbanker said:

bristolleedsfan said:
I have got two choices kick can down the road for 5 years by cancelling ISA transfer and accept 4% AER..  I had to take issue with UBL UK 5 years ago after they seemed to have dim view of apparent fact that no interest should be lost during ISA transfer in, they did rectify matters with a hump,

Or - 

Make issue with UBL UK regarding  then only informing me after matured ISA had rolled over that they do not pay interest during 14 day cooling off period if in there words withdraw, + issue of them only referring to withdraw the funds within maturity letter and subsequent rollover letter.

Seems to me that the best thing for you to do is to focus on where the best place is for your money for the next five years, if that's the term you have in mind - you could choose to embark on a big argument with UBL about what you feel are significant omissions in their maturity letters but if the net effect of that is just a week's missed interest then chances are that'll be heavily outweighed by committing to an inferior fixed account for the next 260 weeks, so I'd have thought that concentrating on the bigger picture is a more productive avenue?

Decision to transfer out to YBS loyalty 6 access ISA was to keep my options open hoping to get at least 4% hopefully more on 5 year ISA fix at later date, in meantime would be getting 4.25%, maybe more if base rates increase. 


Last night sent secure message to YBS -  

Is my understanding correct that there should be no loss of interest during ISA transfers?

I have only been informed by UBL UK rollover letter by post that it does not pay interest during 14 day maturity auto rollover cooling off period, maturity letter did not mention this.

Sent UBLUK this on follow up secure message maturity options thread

Today I received rollover letter  stating you do not pay interest if withdraw during cooling off period, had this been mentioned within maturity letter I would have initiated transfer out request 3 weeks earlier.

 Just so that it is clear whether it be cancelling transfer out or transfer out completing and complaining to financial ombudsman I will not lose any interest from 23rd April till when you manage to get around to transferring this ISA out, you chose not to transfer out this ISA on 23 April when you transferred other ISA out

I have sent YBS secure message relating to my understanding that there should be no interest lost during ISA transfers and mentioned you now tell me you do not pay interest during rollover 14 day cooling off period.

masonic

I would have just told YBS that UBL received their transfer request on 21st and have paid interest up to 23rd, then asked would they pay interest from 24th onward.

bristolleedsfan

UBL UK sent ISA transfer to YBS today, no interest since Maturity,  no reply from UBL to my secure message.

I will put together complaint including putting forward concern that paying no interest during transfer out period when within maturity rollover 14 day cooling off period is effectively a penalty charge due to only UBL UK being in control of when funds get moved to new ISA provider.

bristolleedsfan

For benefit of thread subject this is complaint I lodged to United Bank day or 2 ago, aim is to ask as many questions as possible so as to make it difficult for them not to uphold the complaint, seeking best outcome, loss of interest about £25. based on United Bank maturity rollover rate.

Concern/Complaint that whether by design or some kind of unintended consequence Maturity letter dated 28 March 2023 sent by post was misleading, not transparent, that United Bank waited  8 working days to transfer funds to new ISA provider effectively levying 12 calendar day interest penalty charge/punishment for transferring my ISA away from them during Maturity rolllover 14 day cooling off period which only United Bank could action and that not paying interest during this mentioned period which the consumer has no control over when funds move clearly contradicting FSA stipulation that interest must be paid from day of receiving electronic funds.

 Making and receiving payments 

Making and receiving payments Find out what you can expect from your bank when you make and receive payments, how long transactions should tak...

Receiving a payment

If money is paid into your account, it must be available to you and start earning interest as soon as the bank receives it if it was:

• made electronically, such as by CHAPS, Bacs or Faster Payments systems
• cash deposited at the counter of the bank
• transferred between accounts at the same bank

If money is paid into a cash ISA or a savings account with a notice period, it doesn’t have to be made available immediately. But the bank must start paying interest on the same business day that it gets the money

 

Background to complaint concerns

Maturity letter 28 March stated - Whether choose to re-invest or auto rolled over get prevailing rate that they offering at the date of maturity, thus no apparent advantage choosing to re-invest with UBL UK.

If we do not receive your instructions before Maturity Date we will re-invest your money into an ISA of the same period and interest payment frequency at the prevailing interest rate

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 .........

 

I was first informed that no interest was paid during Maturity 14 day cooling off period of Maturity rollover if funds withdrawn during this period after the funds had rolled over within  rollover letter dated 24 April sent by post and received 30 April,

Had Maturity letter dated 28 March stated no interest paid during 14 day cooling off period of Maturity rollover period if withdrawn I would have organised transfer out to Instant Access Cash ISA elsewhere being as United Bank do not offer Instant Access Cash ISA

 

1. Why did Maturity letter dated 28 March not state that no interest would be paid of funds withdrawn during 14 day cooling off period of maturity rollover.?

 

2.United Bank confirmed to me by secure message on 21 April received ISA transfer request from YBS, Why did ISA maturity rollover contradicting Maturity letter "If we do not receive your instructions before Maturity Date we will re-invest your money into an ISA of the same period and interest payment frequency at the prevailing interest rate" ?

 

3. I had two separate 5 year rate ISA same maturity date different reference numbers,the other maturing ISA fix I had given instructions to United Trust Bank 7 year ISA,

 

20 April I sent secure message to UBLUK informing that following day I would be instructing YBS to transfer in now complained about maturing ISA, UBL confirmed on 21 April had received this transfer out request from YBS

 

Being as UBL UK did receive my instructions before Maturity Date why did UBL UK re-invest my money into an ISA of the same period and interest payment frequency at the prevailing interest rate contradicting what it said on maturity letter 28 March 2023?

 

4. After I replied on 22 April with clarification about my transfer out wishes relating to both Maturing ISAS on 24th April I received reply " thank you for your clarification we would like to confirm that we have forwarded your request to the concerned dept for processing"

 

5. 24th April Why was only 1 maturing ISA transferred out ? Why were both maturing ISA not transferred out simultaneously  on the same day ?

 

6. 25th April Why was Matured ISA  REF .............. 24 APR not transferred out ?

 7  26th April Why was Matured ISA  REF ,,,,,,,,,,,,, 24 APR not transferred out ?

 8  27th April Why was Matured ISA  REF ............. 24 APR not transferred out ?

 9  28th April Why was Matured ISA  REF ............. 24 APR not transferred out ?

10. 2 May Why was Matured ISA  REF ...................24 APR not transferred out ?

11. Why do United Bank show apparent contempt for BSA, TISA, BBA industry guidelines  overriding principal aim intention that there should be no loss of interest during ISA transfers

https://www.tisa.uk.com/publications/762_BBA01-470823-v1-Revised_Cash_ISA_Transfers_Industry_Guidelines_-_1_Janu....pdf

 "Similarly, if funds are transferred electronically then the payment must be initiated on the first day on which interest no longer accrues on these funds"

 

12. Why do UBL UK show apparent contempt for HMRC stated best practice ?

 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/693198/Appendices.pdf

We recommend that ISA providers adopt the procedures below, devised by representatives of the industry.

 The timelines shown for each step in the transfer process are consistent with ISA providers’ legal obligations.

The maximum timeframe for actioning Step 2 should be 5 working days, where day 1 is the first day the request is received in the organisation.

 2 Production of Transfer History Form and Payment: For paper this includes the production and despatch of the cheque together with the Cash ISA Transfer History Form2 . For electronic this includes the initiation of the electronic payment following receipt of the “Acceptance of Transfer” and “Ready for Payment” message from the New Party.

The date on the cheque must match the first day where interest no longer accrues on the funds being transferred. Similarly, if funds are transferred electronically then the payment must be initiated on the first day on which interest no longer accrues on these funds.

 

29th April on receiving Maturity rollover communication dated 24th April stating no interest paid during rollover period of funds withdrawn during that period, I sent secure message relaying unhappiness/dissatisfaction to which I received no reply.

 

The above was opportunity for United Bank to resolve my concerns ensuring that I did not lose out by paying interest up until date of transfer as per above stated guidelines.

 

This subsequent complaint is designed to be considered on merits by Financial Ombudsman

 

To resolve complaint I require :

 All my 12 questions of complaint/concerns answered in writing

 Interest paid to my now transferred out Cash ISA covering period that United Bank rolled over maturity ISA and chose not to transfer ISA funds out to new provider 24 April - 2 May 2023 inclusive

 £50 compensation to me to cover time stress caused to me having to make complaint that I should not have had to make United Bank  having failed to meet apparent ISA providers’ legal obligations. as well as  failing to inform me within maturity letter 28 March 2023 that it does not pay interest during maturity rollover 14 day cooling off period if funds are withdrawn during that period.

masonic

The omission of the information about interest from the upcoming maturity letter dated 28th March (and inclusion only in the rollover letter dated 24th April) is probably the most important aspect of your complaint. It would have given you the opportunity to avoid this situation entirely. I think it is misleading to state that you have 14 days to withdraw money without any charges, but fail to mention loss of interest.

bristolleedsfan

masonic said:

The omission of the information about interest from the upcoming maturity letter dated 28th March (and inclusion only in the rollover letter dated 24th April) is probably the most important aspect of your complaint. It would have given you the opportunity to avoid this situation entirely. I think it is misleading to state that you have 14 days to withdraw money without any charges, but fail to mention loss of interest.

I strongly suspect answer to who was old ISA provider will be United Bank/UBL UK, Despite plenty of notice of transfer out request both via new provider and postal notification, transfer out was sat pending for maximum amount of time they thought they could get away with whilst at same time sitting on consumers money for free.

Rolling over ISA after being given maturity instructions to transfer out contradicts maturity notification letter, also breaches guidance referred to within my complaint that ISA transfer out should be completed on the same day as old provider ceases to pay interest.

https://forums.moneysavingexpert.com/discussion/6445818/not-paid-interest-on-isa-for-period-between-maturity-date-and-transfer-to-new-isa-provider#latest