Ombudsman upholds Isa complaint

Ombudsman upholds Isa complaint

Fos has warned banks and building societies to ensure they are treating customers fairly when it comes to tax-efficient savings such as Isas.

According to an adjudication published on Fos’s website, an elderly Scottish couple were given poor advice over the telephone, which caused them to miss their Isa deadline.

The husband called the bank, which Fos did not name, at the start of April to transfer some money from his savings account to an Isa in his wife’s name.

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But when he tried to transfer money, the adviser told him he could only move a maximum of £2,000 in one go.

Two days later, the bank called the man to tell him that the payment had been stopped by their security system. Worried, and not sure what this meant, the customer cancelled the transfer altogether, meaning he had missed the deadline.

The Fos decision stated: “When we listened to Mr S’s call to the bank, the adviser failed to explain that, because Mrs S’s Isa was with the same bank, another type of transfer was possible – as long as they had her authorisation.

“We pointed out that the issue would not have arisen if the adviser had arranged an internal transfer. And it was likely that Mr S could have transferred all the money he had wanted to before the tax-free savings deadline.”

The bank was ordered to make up the lost interest on the savings Mr S had wanted to transfer.

Fos comment

A spokesman for Fos said: “While it is not our role to take a view about products and interest rates that businesses choose to offer in general, we can look into whether individual customers have been treated fairly.

“If someone has lost their tax-free savings allowance for the financial year, careful thought needs to be given to how to put things right – bearing in mind the possible tax implications.”