Kent Reliance - loss of interest on matured ISA

Sepulveda

I had a 1 year fixed ISA with KR, £10k, which matured on 13th November. I received a letter less than a week before that date telling me that unless I gave instructions, they'd put it into another fix (!) I managed to get through on the phone and gave instructions for them to put it into an EA ISA at 3.85%, just to give me time to decide what to do with it as I was about to go away for a week.

The new ISA was opened on 19th November. I've queried this, and they told me they use NatWest as a clearing bank (stupidly I'd assumed it would be an internal transfer) and that no interest would be paid on the money during the period that the fixed ISA closed and the new one opened. So thats a loss of 5 days interest on £10,446. I complained on the phone but was basically told, tough, thats how we do it.

I know I'm being pedantic but is this right or fair? Are they allowed to do this? I have ISAs with other institutions where ISAs have transferred internally pretty fast (Paragon for example), with no loss of interest. To be fair, I don't feel I know that much about how ISAs work but this made me really annoyed. I've heard so many negative things about the KR transfer out process I dread what will happen when I transfer it to another provider!

eskbanker

Sepulveda said:

I complained on the phone but was basically told, tough, thats how we do it.

Was it properly logged as a formal complaint, e.g. with a reference number, etc?  If their published complaints process is followed without adequate resolution then you have the right to escalate it to the ombudsman service, but I'd have thought they'd offer some 'go away' money before that, especially if you're only quibbling about a fiver or so.

They ought to give more than a week's notice of maturity options too, especially if the default is another fix, so if you include that in your complaint it might help sway the outcome, although worth researching the product Ts & Cs to see what they say about both issues....

Sepulveda

No, not properly logged, they didn't offer to do that and stupidly I didn't think to ask. It was the foreign call centre, so it was a bit difficult to understand what was being said at times, but basically the man kept repeating the same thing over and over again like he was explaining it to a small child! Very frustrating.

Thanks for your advice. I will have a look into their formal complaint procedures and the ISA T&Cs, which I kept a copy of. I've never made a formal complaint to a financial institution before, but I've seen from on here that many people have, so its worth a try!