ISA left with negative balance after transfer

jamesrcmd

I transferred my Cash ISA from HSBC to Halifax, which was completed today. Now my old HSBC ISA is showing a debit of -£25.66, which is apparently Halifax's fault for transferring a higher amount (I had set the transfer for the full balance).

HSBC expect me to transfer £25.66 from my current account to cover the debit but if I do so I'm worried they will think I'm subscribing to their ISA for the current tax year, even if this would bring the balance back to zero.

Has this happened to anyone before? Can HSBC charge me overdraft fees even if it's a savings account? Should I try asking Halifax to reverse the £25.66 they wrongly transferred?

Thank you.

masonic

I think you are correct that if you paid into the ISA to clear the debit, it would count as a 2025/26 subscription, how could it not? If HSBC sent the wrong amount to Halifax, then the two need to work it out between themselves. But it is very hard to see how this could have happened in the first place.

jimjames

jamesrcmd said:

I transferred my Cash ISA from HSBC to Halifax, which was completed today. Now my old HSBC ISA is showing a debit of -£25.66, which is apparently Halifax's fault for transferring a higher amount (I had set the transfer for the full balance).

How can it be Halifax's fault when the transfer is made by the sending bank (HSBC)? Halifax don't send anything, they receive what HSBC send. They need to sort it between themselves otherwise it will affect your ISA allowances.

tacpot12

I think I would ask HSBC to write off your debt as a goodwill gesture. Make the point that HSBC sent the wrong amount and if you pay anything it it will count as part of your ISA allowance for the year. I would also say that if the amount had been larger you would be happy to pay it back. They can only say no. 

TheBanker

I would tell HSBC you have already used your full ISA allowance this year (they won't know if that's not true) therefore there is no way you can pay £25 into their ISA. 

But, are you sure this £25 doesn't represent interest accrued and not yet paid? I've seen with one of my ISAs (not HSBC) that it went slightly overdrawn on the day the funds were transferred out, then went back to nil overnight when their system added the interest and closed the account. 

boingy

I'd go straight in with a complaint to HSBC. It's clearly their screw-up.

jamesrcmd

TheBanker said:

I would tell HSBC you have already used your full ISA allowance this year (they won't know if that's not true) therefore there is no way you can pay £25 into their ISA. 

But, are you sure this £25 doesn't represent interest accrued and not yet paid? I've seen with one of my ISAs (not HSBC) that it went slightly overdrawn on the day the funds were transferred out, then went back to nil overnight when their system added the interest and closed the account. 

It looks like it was interest accrued and not yet paid.

I did transfer the £25.66 from my current account last night as I was afraid HSBC could charge me overdraft fees (not sure if they can do that on an ISA but better safe than sorry).

I just got off the phone with them and they were still adamant that the advice I was given last night was correct. So I asked to raise a complaint. The CS rep put me on hold for almost ten minutes. He came back and said the debit was for interest accrued. I asked why the other CS rep couldn't have told me that last night.

I filed a formal complaint asking them to return the £25.66 to my current account, close down the ISA and give me compensation as they made a mistake and gave me wrong advice. Will update you when the complaint is resolved.

jamesrcmd

Just got a call from the HSBC complaints team.

They returned the £25.66 to my current account, paid £50 in compensation and will close down the old ISA within three working days.

I must say I'm slightly impressed at how quick they were in dealing with my complaint. Hopefully it won't happen again. 🤞

masonic

At some point someone will have facepalmed and no doubt expedited a resolution. It really is quite a shocking sequence of events.