Cash ISA Transfer

George789

I transferred my ISA to Virgin money but then moved it to another provider by opening a new ISA. I did this within the cooling off period, 10th day. Virgin sent the money to the new provider but charged me interest. I had no knowledge of that charge. Is it something I did wrong ?

eskbanker

If you wanted to exercise your cancellation rights within the cooling off period then you'd have needed to contact Virgin and explain that that was what you wanted to do, but if you simply instruct another provider to initiate a transfer then Virgin wouldn't treat that as a 'cooling off' cancellation and you'd be charged the early exit penalty that fixed term products include in their Ts & Cs.

George789

Thank you for letting me know. I wasn't aware and thought new providers would pickup on the fact I was in the cooling off period. Is that the case with all providers? Is that written anywhere in Virgin money?

eskbanker

I don't see how a new provider could know that you're still in the cooling off period at your previous provider?

I haven't studied VM's Ts & Cs, but would expect them to say that you need to contact them to exercise your rights within the cooling off period.

Doctor_Who

George789 said:

Thank you for letting me know. I wasn't aware and thought new providers would pickup on the fact I was in the cooling off period. Is that the case with all providers? Is that written anywhere in Virgin money?

The T&Cs of the current VM fixed rate ISA say:


If you are not happy with your choice of account within 14 days of depositing your ISA subscription, we will help you close your account and you will not lose your right to invest in another Cash ISA, Stocks and Shares ISA, Innovative Finance ISA or Lifetime ISA for that tax year. If you wish to take advantage of this 14-day rule, you must send your cancellation in writing to Savings Operations, Virgin Money, Jubilee House, NE3 4PL, when you close your account we will ensure that our reports to HM Revenue & Customs reflect the correct position. If you do cancel your account, the full amount of your investment, together with any interest earned will be returned to you.

https://uk.virginmoney.com/savings/products/1_year_fixed_rate_cash_e_isa_issue_612/#complaints-and-cancellations

George789

When I read the terms of the 14 day cancellation right, it makes me think that the money will be returned to my bank and not a new ISA with another provider. 

eskbanker

George789 said:

When I read the terms of the 14 day cancellation right, it makes me think that the money will be returned to my bank and not a new ISA with another provider. 

Exactly, so if you want to cancel under those terms, you notify Virgin of that and they return the money back to where you sent it from.

On the other hand, if you instruct another provider to transfer the money, then that can't be combined with cancellation under the cooling off terms, so you're obliged to pay the exit penalty.

George789

When I opened the ISA with virgin. I then transferred it to a better rate virgin account. They have a box that allows you to pick the product and it also writes I will occur no fee in doing so as I am in the cooling off period. But then I went to a new provider and I didn't know I had to write a message or post something to the old provider about cooling off periods.

eskbanker

George789 said:

When I opened the ISA with virgin. I then transferred it to a better rate virgin account. They have a box that allows you to pick the product and it also writes I will occur no fee in doing so as I am in the cooling off period. But then I went to a new provider and I didn't know I had to write a message or post something to the old provider about cooling off periods.

I think you're still missing the point - the cooling off period is there to allow you to cancel a new product and unwind it as if you'd never opened and used it.  A provider may offer penalty-free concessions for internal transfers, where they're still retaining the funds, but if you're instructing a different provider to initiate an ISA transfer, then they'll do so, oblivious to any terms associated with the account they're transferring in from.