Worst Cash ISA transfer saga ever?

masonic

https://forums.moneysavingexpert.com/discussion/comment/82062465#Comment_82062465

Most providers can cope with not having a sort code and account number. This situation has existed for decades and quite a few providers, including building societies, use a central clearing account for bank transfers. NI number is the identifier suggested by HMRC when ISAs were first introduced.

DMB do operate on the basis of "bank sort code, account number and/or roll reference". They use the "or" roll reference where roll reference is NI number. If a provider allows just roll reference then it shouldn't be a problem. If a sort code and account number must be entered, generally all zeroes or anything acceptable to the new provider can be used as this will be ignored by DMB.

Basispointsniffer

As I’m a newbie the forum won’t permit me to copy a statement from DMB AI bot on 29 June 26 that states absolutely the only reference that can be provided is the alpha numeric NI details, this was subsequently re-verified with a DMB human. I’ve yet to identify an alternative provider where the use of zeros in sort code and account number fields and/or the NI details in the roll reference field will permit a continuation on their systems to enable an on line authorisation to their requirements of a transfer in authority.

The DMB cash transfer out process based on the NI details only isn't described in any of the set up documentation I downloaded when opening my account.

In addition it's extremely difficult to verify DMB interest calculations; as I recall the portal at sign up cites the AIR and AER; interest rate changes and statements only cite the effective AER. Whilst I don't have any reason to think DMB interest rate software is deficient, as a matter of principle the lack of transparency and/or inability to spot check without reverse compilation to determine the effective daily rate is unwelcome.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82062604#Comment_82062604

Well it seems the AI and human are not disagreeing with what I said. You must put your NI number in the reference field. DMB will not use any information entered into the sort code and account number field.

You say you've yet to identify a provider that will accept a transfer from DMB, but which have you tried and what sort of ISA are you interested in? Principality and Yorkshire BS have been mentioned as successful destinations in the past but I've no idea if they have a suitable product for you on offer now.

On the subject of interest, my ISA shows daily accrued interest and interest credited each month, which is correct to the penny. I've never heard of "AIR", but the gross rate can be calculated from the AER (see below - you probably already know this) - I don't recall seeing this anywhere for my account, so that's a bit of an annoyance.

gross pa. = [(AER+1)^(1/12)-1]*12

auser99

NSI upheld my complaint - apologised and offered a little compo, which i accepted.

Now just need the actual original transfer to go through - 2 1/2months on!

Usual limbo - awaiting what is now the 3rd cheque to hit Shawbrook. As it's sent 2nd class, who knows how long that'll take. Was sent at the start of last week - so again we wait.

Basispointsniffer

Belated update having exited DMB. I believe a typo in the first sentence of the last paragraph of Masonics post 8 July post at 12.13pm; if so easily done. AIR denotes Annual Interest Rate relevant if the the provider is operating daily compounding. I found an alternative cash only flexi ISA provider, offering a variable acceptable rate who permitted and immediately confirmed they had acted on an on line submitted transfer-in request with zero's in the sort code and account fields on their transfer in page, and the full alphanumeric NI details in their roll reference box. My understanding is this was transmitted to DMB electronically and initiated DMB's process through to their requesting the new provider to issue a ready to receive; nine (9) days to complete.

Some observations re DMB.

1. Absence of disclosure in their T&C's re some important practical aspects of their MO.
2. Loss of 2 or more days interest on the way in.
3. Even if you have daily compounding software DMB don't advise their AIR; obviously you can reverse engineer.
4. DMB assert their daily compounding software is accurate; some might remember the infamous Mandy Rice-Davis observation, being "they would say that wouldn't they!" Perhaps all providers should be required to published IR software accuracy confirmations from their auditors and/or the FCA?
5. Recently DMB haircuts are at least 50 and it seems some to 75 plus basis points. That's expensive for the purported added value service DMB offer, which I contend is trending down as more underlying providers enhance their own portals, and hence are easier to access direct.
6. DMB have advised they can't handle two or more transfers out on the same day, even if the batting order provided.
7. It transpired the high volume of transfer out requests contributed to the delay to my own.
8. It's difficult & time consuming to track the underlying credit exposure via DMB, which could be unfortunate re the FSCS limit if another hiccup in the banking sector, so another tilt towards investing direct with the provider.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82090584#Comment_82090584

If the the error to which you are referring is the use of a plural "do" in reference to the collective noun DMB, then guilty as charged.

Regarding AIR as you have defined it, then that is known almost universally within financial services in the UK as the "gross rate" for historical reasons. Elsewhere the term "simple interest rate" would be used. The abbreviation AIR seems to be used in the industry to refer to the Assumed Interest Rate in the valuation of an annuity contract, so if you wish to pursue a complaint on this matter, it may be helpful to your case to use terminology that the recipient will clearly understand.

You've mentioned your belief that DMB is operating daily compounding, but I do not think that is the case. When I select the interest breakdown, I see a row for "Interest due" underneath "Total interest paid", and this has an information button, which displays when clicked: "This is the interest that has been earned but not yet paid into your account". Interest is calculated on the balance of the account. Therefore the daily interest amount appears to be just for information, with interest actually being paid and compounded monthly.

The lack of information related to interest that would allow you to check the accuracy of your interest is a valid complaint you could raise. I agree with you that it is somewhat unclear exactly what DMB is doing. Just because I am able to back-calculate and get a figure that is in agreement with what they have done (when I assume monthly compounding) does not necessarily mean it is sufficiently clear.

Basispointsniffer

DMB asserted in writing as below re their daily compounding interest calculation.

"For our Cash ISAs and specific savings products, interest is calculated daily based on your contributions, interest already paid, and interest due (earned but not yet credited), ensuring your money compounds exactly as advertised."

My recent focus has been on transferring capital out of DMB, along with as per their explanation for the delay many others. For completeness/curiosity l'll back check their interest calculations in due course.

Incidentally another drawback with DMB (ditto Flagstone) is the blunderbuss/scatter gun marketing e-mails, sometimes 10 or more a month . Given my disclosed profile and I assume their KYC processes it obvious the majority not relevant, but alas due to inadequate headers it's necessary to open/scan to confirm non applicability. I enquired; both operate an all or nothing approach hence another reason to invest elsewhere.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82091148#Comment_82091148

Are you interpreting that extract as meaning that interest is being compounded daily?

Basispointsniffer

Yes. Although DMB only credit interest on the first day of the following month they've stated interest in calculated daily including on interest earned but not yet credited, so to me that's daily compounding.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82091825#Comment_82091825

I don't disagree that the text you quoted seems to imply interest is earned on interest earned and not yet credited. However, clause 3.8 of the T&Cs states "Interest is earned daily on cleared balances and is paid at the frequency set out in the Key Features Document for the relevant product, rounded down to the nearest penny when paid."

So the T&Cs contradict the implication in the written statement you received. FWIW, the T&Cs are consistent with what I have been receiving.