Transferring cash ISA

Get a life?

You've missed the point that this has happened to probably thousands of people, and the banks have pocketed interest that does not belong to them. I'm not bothered about the small amount of my money, but I am concerned about the principle and the total amount that has been defrauded out of people transferring cash ISAs to Intelligent Finance as a result of IF offering such a high interest rate. If a bank is not following industry standard procedures, then it should be brought to account, for the sake of all account holders, not just one.

Think before making such inane comments.

Not half as inane as calling it defrauding.

In message , Nicholas F Hodder writes

Nothing. I cant really believe that you couldn't have foreseen that this is what would happen. Why should Abbey give you a cheque for free?

Because Miss Diane told him they should.

Who said anything about cheques? And what is free?

Anyway, when I transferred from Smile to Abbey, the transfer happened on the same day. This is how it should be.

Stealing somebody else's interest is defrauding. However, I have yet to work out which bank is at fault.

Nobody has stolen anything, moron.

message

That just proves you've missed the point.

In message , Nicholas F Hodder writes

Thats the way the dosh gets transferred.

They didnt charge for doing it.

Not so, see their web site

snip

Q. How long will it take to reach the new provider?

A. Once we've completed the transfer, it's despatched to the new provider by First class post.

Q. Will I lose any interest?

A. Not if you're transferring from smile. Interest accrues on the cleared daily balance of the account and all interest is paid to the date of the transfer (this may differ with other providers).

Q. My deposit was not paid into my new account until y date, this means that I lost x days' interest. Will you compensate me?

A. Not if you're transferring from smile. We pay interest to the date of transfer, if there are any delays with the new account any compensation claim is with your new provider. If you're transferring to smile and we've made mistakes, our aim is to put those right.

unsnip

So Smile make up the few extra days interest, but they dont have to.

This is how it should be.

Eh? Why? Smile pay a paltry rate of interest on their ISA, so they keep a wodge back to cover costs like those incurred transferring itinerant ISAs. I dont see why those who stay with one ISA provider should suffer a lower interest rate just to cover the costs of those who keep switching round.

Abbey's terms for a transfer say quite clearly "We will cash in all or part of your ISA before the transfer".

The account transfer did happen on the same day, only because Abbey backdated the account opening and the interest accrual, not because of what Smile did.

Fair point, but if there was a more automated system of transferring a cash ISA, the costs to the banks of their customers doing so would be a lot lower. The use of cheques to effect ISA account transfers is ridiculous, and only allows the old provider to earn interest for a few days on money that should no longer be in their possession.

Anyway, thanks John for the useful reply.

In terms of what you "should" do, I'm afraid I agree with the other posters who have told you not to worry about it. In terms of what you "could" do if you want to take it further (although I don't think you have any chance of success), you could write of formal letter of complaint to both banks. It would be sensible to include with each complaint a letter of authority allowing each bank to contact the other to discuss any issues relevant to your complaint.

The banks must investigate your complaints properly, under the Financial Services Authority's rules. If they are unable to resolve the complaint to your satisfaction, they must give you the right to contact the Financial Ombudsman Service about the issues. (The FOS will be able to determine whom your complaint should be against). There is no guarantee that the FOS will actually consider your complaint, as its terms of reference allow it to refuse to consider complaints about very tiny amounts of money. They will certainly decline to consider a complaint about tenths of a penny, but the amount of the interest you claim to have lost will be relevant. Alternatively you could try the small claims track.

Laura

Thanks for the good advice.

The amount in question for many people will only be around 10, i.e. 4.6% for 5 days on around 16k, which I believe is about the most you could have in an ISA so far. I'm more concerned that the FOS or other authority should investigate the ISA transfer procedures with regard to the industry as a whole, rather than consider an individual complaint about my small amount. Multiply 10 by the number of people transferring cash ISAs of this size, and the banks are skimming quite a lot of money that they shouldn't be.

In message , Nicholas F Hodder writes

Yes Ive re-read and you are right.

Hmmm, perhaps you should see the other thread elsewhere about BACS and the implementation costs and logistics of next day transfers never mind same day accounting! ISA transfers are not of sufficient volume to justify a special system and I am at a loss to know what could replace a cheque. Have you any suggestions of how an accurate non cheque, same day, system might be implemented?

My pleasure.

They make all the ISA providers open mini-offices, all within a single, secure, building somewhere. Each transfer request ends up being accumulated daily into a list, instructing each member bank's office staff to wheel round real cash in trolleys around the buildings. Bank A has to wheel £X to bank B, £Y to C, etc. The logistics are fairly straightforward, and once all the trolleys are parked, the mini-offices report back to head office how much cash they've just received from all the other banks, and whose accounts should now be credited. Once the system has been up and running for a few weeks, and the banks all trust each other, they needn't even use real cash, real trolleys, or real offices, and they can sell the building to the Scottish parliament. You know it makes sense.

In message , Ronald Raygun writes

O HAIL OH GREAT ONE!!!!!!

See? Now why hasn't anyone else ever thought of it? Eh?