Misleading information from TSB about options at end of Fixed rate 2 year ISA

Vember

Last month my TSB 2 year fixed rate ISA ended its term. TSB sent me two letters and a link to their website which all listed my options for re-investing. The lists did not include the option to ask another provider to complete an ISA transfer. I consider this to be misleading, so I complained to TSB, which rejected my complaint. I referred the matter to the Financial Ombudsman, who agreed that the letters and link were misleading, and will suggest to TSB that the lists be amended. I requested an ISA transfer to another provider at 0.75% greater interest rate than offered by TSB. This will increase the 2 year return on my £41.1k ISA by £615. 
I wonder how many TSB customers have been misled.

eskbanker

Vember said:

Last month my TSB 2 year fixed rate ISA ended its term. TSB sent me two letters and a link to their website which all listed my options for re-investing. The lists did not include the option to ask another provider to complete an ISA transfer. I consider this to be misleading, so I complained to TSB, which rejected my complaint. I referred the matter to the Financial Ombudsman, who agreed that the letters and link were misleading, and will suggest to TSB that the lists be amended. I requested an ISA transfer to another provider at 0.75% greater interest rate than offered by TSB. This will increase the 2 year return on my £41.1k ISA by £615. 
I wonder how many TSB customers have been misled.

It surprises me that FOS would consider that to be misleading, I would have thought that it was implied that options offered would be those available from TSB, rather than having to spell out that ISAs can be transferred elsewhere (at any time).

I also didn't think that FOS actually had any authority to ask TSB to make wider changes to their business processes, in that they'll normally only consider how the complainant was dealt with.  Having said that, if they've only said that they'll suggest that to TSB, that may not actually carry any weight - did FOS actually uphold your complaint and advise TSB to pay a goodwill gesture of compensation to you?

Vember

1. As you say, my ISA could have been transferred at any time, but with a 180 day interest penalty, over £700. That does not form any part of my complaint.
2. From the FOS website: "We resolve disputes fairly and impartially, and have the power to put things right".
3. From the FSO reply to me; 

" this service can't order TSB to change its cash ISA maturity letters, which would would be the job of the regulator the FCA, but I've certainly suggested the bank does so to include the transfer out option" That resolves my complaint to the FSO to my satisfaction. I suffered no harm or loss, so I made no complaint about that to TSB or the FOS, and the FOS did not uphold such a complaint (which I had never made). At a later stage I may consult the FCA.
4. TSB has deposited £25 in my account "for the distress and inconvenience caused"

. I requested this money be withdrawn. TSB stated that this was not possible.

eskbanker

Vember said:

1. As you say, my ISA could have been transferred at any time, but with a 180 day interest penalty, over £700. That does not form any part of my complaint.

My point is that the ability to transfer elsewhere exists both before and after maturity (albeit the penalty ceases to apply then) so isn't something new that needs to be explained at maturity.

Vember said:

2. From the FOS website: "We resolve disputes fairly and impartially, and have the power to put things right".
3. From the FSO reply to me; 

" this service can't order TSB to change its cash ISA maturity letters, which would would be the job of the regulator the FCA, but I've certainly suggested the bank does so to include the transfer out option"

Yes, that aligns with what I was saying, i.e. they don't have the power to order TSB to make changes for the future benefit of others, but can get them to resolve your specific issue if applicable, i.e. by doing something with your ISA or paying you compensation, etc.

Vember said:

That resolves my complaint to the FSO to my satisfaction. I suffered no harm or loss, so I made no complaint about that to TSB or the FOS, and the FOS did not uphold such a complaint (which I had never made). At a later stage I may consult the FCA.

It sounds like you made some sort of informal contact with FOS, rather than following their prescribed process of making a formal complaint to the institution and then escalating that complaint to FOS if unhappy with the response:

https://www.financial-ombudsman.org.uk/make-complaint

Hence their reference to 'resolving disputes', whereas there isn't actually a (formal) dispute to be resolved here.

Vember said:

4. TSB has deposited £25 in my account "for the distress and inconvenience caused"

. I requested this money be withdrawn. TSB stated that this was not possible.

No idea why that would be!

Vember

eskbanker said "It sounds like you made some sort of informal contact with FOS, rather than following their prescribed process of making a formal complaint to the institution and then escalating that complaint to FOS if unhappy with the response:"

Not so. I followed the prescribed process exactly. i.e Complaint to TSB. Complaint rejected by TSB. Complaint to FOS.. All done on the prescribed forms.

eskbanker

Vember said:

eskbanker said "It sounds like you made some sort of informal contact with FOS, rather than following their prescribed process of making a formal complaint to the institution and then escalating that complaint to FOS if unhappy with the response:"

Not so. I followed the prescribed process exactly. i.e Complaint to TSB. Complaint rejected by TSB. Complaint to FOS.. All done on the prescribed forms.

In response to this two-part question:

eskbanker said:
did FOS actually uphold your complaint and advise TSB to pay a goodwill gesture of compensation to you?

you answered:

Vember said:

3. From the FSO reply to me; 

" this service can't order TSB to change its cash ISA maturity letters, which would would be the job of the regulator the FCA, but I've certainly suggested the bank does so to include the transfer out option" That resolves my complaint to the FSO to my satisfaction. I suffered no harm or loss, so I made no complaint about that to TSB or the FOS, and the FOS did not uphold such a complaint (which I had never made). At a later stage I may consult the FCA.
4. TSB has deposited £25 in my account "for the distress and inconvenience caused"

. I requested this money be withdrawn. TSB stated that this was not possible.

If you're now saying that you did complain to TSB and escalated it to FOS, why not answer the actual question asked?!  So, again, did FOS uphold your actual complaint and did they instruct TSB to pay that token goodwill gesture?

Vember

Here is my actual complaint, copied and pasted from the original FOS document, but with my account number deleted for reasons of security:
Complaint form 5 Tell us about your complaint – what happened? Date of Final Response Letter : 28/10/2024 I have a fixed rate ISA, value over £41,000 with TSB. account number xxxxxxxx. The ISA expires on 13th November 2024. I have received two letters from TSB, dated 7th October and 31st October, each listing my "options at a glance" when the account closes. My complaint is that in neither letter is there an option to ask another company offering ISAs to submit an ISA Transfer form to TSB. My complaint is further reinforced by the fact that both letters state that if I fail to re-invest my ISA in a TSB product I "will lose the tax free benefits of keeping it in an ISA." This is a false statement. The letters state "your options are" but, at the very least, they should state "your options include....."

The Ombudsman rightly rejected any complaint that I had suffered any loss, and I have made no such complaint, but agreed that the statements were misleading, and would suggest to TSB that the documents be amended.
The Ombudsman did not instruct TSB to pay the non-returnable £25. I made no loss, so no compensation was appropriate.

eskbanker

Vember said:

Here is my actual complaint, copied and pasted from the original FOS document, but with my account number deleted for reasons of security:
Complaint form 5 Tell us about your complaint – what happened? Date of Final Response Letter : 28/10/2024 I have a fixed rate ISA, value over £41,000 with TSB. account number xxxxxxxx. The ISA expires on 13th November 2024. I have received two letters from TSB, dated 7th October and 31st October, each listing my "options at a glance" when the account closes. My complaint is that in neither letter is there an option to ask another company offering ISAs to submit an ISA Transfer form to TSB. My complaint is further reinforced by the fact that both letters state that if I fail to re-invest my ISA in a TSB product I "will lose the tax free benefits of keeping it in an ISA." This is a false statement. The letters state "your options are" but, at the very least, they should state "your options include....."

The Ombudsman rightly rejected any complaint that I had suffered any loss, and I have made no such complaint, but agreed that the statements were misleading, and would suggest to TSB that the documents be amended.
The Ombudsman did not instruct TSB to pay the non-returnable £25. I made no loss, so no compensation was appropriate.

Sounds like a bit of a waste of time pursuing this via FOS then, unless you feel that them writing an unenforceable advisory letter to TSB constitutes a positive outcome - is that what you were hoping to achieve?

Vember

Yes, that's what I was hoping to achieve. It forms a basis for referring the matter to the Financial Conduct Authority, as I mentioned earlier. The Financial Services Ombudsman, in its final ruling, informed me that the FCA has the power to order, rather than suggest.  

eskbanker

Vember said:

Yes, that's what I was hoping to achieve. It forms a basis for referring the matter to the Financial Conduct Authority, as I mentioned earlier. The Financial Services Ombudsman, in its final ruling, informed me that the FCA has the power to order, rather than suggest.  

It doesn't form any sort of basis for going to the FCA, in that they won't care what an FOS adjudicator thinks about the issue, so if your intention was always to go to the FCA then it would have made more sense to simply do so!

TheSpectator

The sooner they bring in charging for silly complaints to the Ombudsman the better.

The level of spoon feeding needed by some is quite something to behold.