MoneyBox Cash ISA - Loss of interest on transfers - Advice pls?

CJunc

Hi all,

I recently opened a MoneyBox Cash ISA and set up an ISA transfer from my existing cash ISA, for £85K. My existing provider, Coventry Building Society, paid interest right up to the day they sent the transfer, and they chose a transfer method that they said meant the funds arrived with MoneyBox the same day. MoneyBox didn't credit it to my account until 2 days after that, so there was 2 days where that sum was not earning interest (over £22). I was not expecting this loss when I opened the a/c because I have held many different cash ISAs and often do ISA transfers, and this is the first time interest payment has not been continuous. 

I contacted MoneyBox, who responded promptly, but have said that they will not cover the 2 days interest and referred me to their terms and conditions, which I admit I didn't not fully take in when I opened the account:

We do state in our terms and conditions that when the you transfer in, the funds will "move through operational Moneybox Trust Bank Accounts and/or Client Bank Accounts (as applicable) on the way in and out of the applicable Moneybox product. When your money is in these operational bank accounts you will not earn interest"

It appears that the delay in paying interest could be any number of days of their choosing! Is that even legal?!

I want to transfer out to a normal bank, but I am concerned that I could lose even more interest. I have asked them how many days they will not being paying interest for before they transfer my funds to my new provider, but their answer was similarly woolly. Definitely hidden charges that I was unexpecting! I really think these losses should be made clearer to new customers.

I'm not sure what to do for the best now. They are registered with the FCA. I could transfer out, hope for the best and put losses down to experience. However, I guess total loss could easily amount to over £50. A hefty charge for two transfers! I'd like to recoup as much of that as possible. I am still within their 30 day cooling-off period. I guess it's long shot, but I was wondering if could cancel and get things put back to how they were before I opened the a/c? or at least get the lost interest back somehow. 

Grateful for advice.

eskbanker

https://www.gov.uk/guidance/transfer-an-isa-if-youre-an-isa-manager#cash-isa-transfers links to a guidance document recommending that cash ISA transfers should be conducted without a gap in interest but, as they say, it's not mandated:

Appendix B (PDF, 364 KB, 9 pages) contains guidance produced by the industry on best practice for cash ISA to cash ISA transfers. While we recommend that managers adopt these procedures, they are recommendations only and are not prescriptive. However, the timetable above must be adhered to.

CJunc

Thank you eskbanker. Looks like the relevant part is:

For electronic payments, interest on the transferred funds should be backdated either to the date the payment was initiated, inclusive, or to the date which represents ‘day 16’ of the transfer process, inclusive – whichever is earlier.

In my case I think this equates to "the date the payment was initiated, inclusive". So MoneyBox are not following the gov guidance, but so what, I guess! Is there anything else that does enforce when they pay interest from, or could it be any number of days, and we are just at the mercy of how generous they are feeling that day?

Bigwheels1111

I understand your pain.
Raisin does the same thing.
Although this year they switched banks, now payments arrive same day and fund products same day.
Used to take 2 day minimum.
My bank messed up 3 large transactions to fund new savings.
Friday to Monday.
They paid me £130 ish for lost interest and £50 good will.

eskbanker

CJunc said:

Thank you eskbanker. Looks like the relevant part is:

For electronic payments, interest on the transferred funds should be backdated either to the date the payment was initiated, inclusive, or to the date which represents ‘day 16’ of the transfer process, inclusive – whichever is earlier.

In my case I think this equates to "the date the payment was initiated, inclusive". So MoneyBox are not following the gov guidance, but so what, I guess! Is there anything else that does enforce when they pay interest from, or could it be any number of days, and we are just at the mercy of how generous they are feeling that day?

As above, the government guidance is non-binding, so there's nothing to enforce compliance and you're at the mercy of their Ts & Cs, despite how vague they are on the subject....

CJunc

Thanks both.

Glad to hear that your bank corrected their mistakes Bigwheels1111. Unfortunately, moneybox is refusing to refund my lost interest 

I don't suppose being a new customer still within the cooling-off period for the product helps me? e.g. a cancel/reset option, as if it never happened ? I presume I'd still the lose the interest?

eskbanker

CJunc said:

Thanks both.

Glad to hear that your bank corrected their mistakes Bigwheels1111. Unfortunately, moneybox is refusing to refund my lost interest

I can understand why you might feel differently but it's not really 'lost' interest that they should be expected to 'refund', it's simply that the money was in transit via intermediary accounts en route to your interest-earning ISA, as explained in their terms (even though they don't clarify how long that takes).

CJunc said:

I don't suppose being a new customer still within the cooling-off period for the product helps me? e.g. a cancel/reset option, as if it never happened ? I presume I'd still the lose the interest?

Their terms are clear that you'd only receive back what you paid in, with no interest added at all, and the money obviously wouldn't be earning interest anywhere else for the days since it left your Coventry account.  It's maybe worth transferring if there's a better-paying account that suits your needs, but if not then it would seem that you're perhaps in danger of cutting off your nose to spite your face....

CJunc

Thx. Understand.

The other issue that I discovered is that they actually deposit your money with other banks. Santander and HSBC currently, I believe. So, if you already have savings with them, you can go over the FSCS limit. So, yes I want to transfer out, but TBH, I'd have to transfer out at some stage anyway, so I'm going to incur the cost of doing so at some point anyway.

Must read the smallprint in future. 

Thx for your advice. 

iwant2asave

I've just discovered that I have 5 days where I was not earning interest from when the existing provider transferred funds to moneybox.  I presume its a similar scenario to reported here in that it's in a moneybox trust or intermediary account..

However I have searched the terms and conditions and I cannot see anything that mentions about a trust or intermediary account and that it would not earn interest while in there.  Does the op or anyone else know the relevant reference for this in the moneybox t&c?

masonic

iwant2asave said:

I've just discovered that I have 5 days where I was not earning interest from when the existing provider transferred funds to moneybox.  I presume its a similar scenario to reported here in that it's in a moneybox trust or intermediary account..

However I have searched the terms and conditions and I cannot see anything that mentions about a trust or intermediary account and that it would not earn interest while in there.  Does the op or anyone else know the relevant reference for this in the moneybox t&c?

https://www.moneyboxapp.com/terms-and-conditions/#TRANSFERS IN