Questions of cash: 'Why wasn't I told my ISA could be closed?'
Saturday 18 August 2007
Q. I took out an ISA with Leeds Building Society in July 2001, and made regular contributions. In May last year, I discussed ISAs with my local branch and transferred the balance to a three-year base-rate tracker ISA. My standing-order payments continued, but my last two payments were returned to my bank. Leeds had closed my ISA to further savings. Its branch suggests that I take out a new ISA in April 2009, but I want to know why I was not told my ISA could be closed when I transferred it? I have lost interest on the money I tried to save since April, and if I open a new ISA, it will earn less interest on a smaller balance.
LD, by email
A. Leeds Building Society says that its savings accounts are priced relative to market rates, which fluctuate, and because of this, it reserves the right to offer new savings accounts and close existing products to new investments. However, it accepts that the literature given to you did not make this clear, and that it was reasonable for you to assume that additional investments could continue. As a result of your enquiry, all Leeds customers with three-year base-rate tracker ISAs will be able to make additional investments. Your ISA has been reopened and you are being compensated in full for your loss of interest.
Q. I received a flyer with my May gas bill from Southern Electric [a trading name of Scottish and Southern Energy], stating that the price of its gas reduced from 1 March 2007. But when I asked Southern Electric why my bill hadn't been amended to reflect the reduction, I was told there had been a printing error and it should have read 1 April 2007. Should I ask the company to honour the reduction, as it was its mistake? GE, Wrexham
A. Scottish and Southern Energy gas prices dropped from 1 March 2007, but your bill was produced too soon after that date to benefit from the price reduction. It seems that when you phoned the company, you were given information relating to electricity prices, which fell a month later. Given this misunderstanding, and as you expected to see the reduction from 1 March, you will be rebilled at the reduced prices for the whole of the last account period. Your account has been credited with £29.73.
Q. I have almost £10,000 in a Tessa ISA with Nationwide, earning 5.4 per cent, rising to 5.45 per cent when it goes over £10,000 later this year. But could I get a better rate elsewhere? I can't find a comparison of Tessa ISA rates. LE, by email
A. The website www.moneysavingexpert.com lists the best rates for Tessa-only ISAs, or Toisas, and shows Kent Reliance building society as paying 5.96 per cent on its no-notice direct Tessa-only ISA, and the Abbey direct ISA as currently paying 6 per cent for balances over £9,000.
Q. In November 2005, my son had a slight collision with another car. The driver told us that they had only paid £100 for the car and it hadn't been MOT tested, so they wouldn't make a claim. We now find that the driver and her husband have made a claim for £3,000 from Co-operative Insurance Services. My son is being charged premiums of £500 because of this, yet we had not been informed about the claim. TB, Liskeard
A. You advised CIS of the accident at the time, and explained that no claim was being made, but subsequently a third-party injury claim was made because of apparent whiplash injuries, which commonly manifest some time later.
CIS says: "The fact that the car had no MOT has no bearing on the claim, as there was no dispute over liability, nor did the accident occur as a result of the condition of the third party's vehicle. Consequently, CIS had no option but to consider the third-party liability claim. When a claim is settled under a motor policy and the policyholder is deemed to be at fault, it is standard practice to reduce the no-claims discount, unless the policyholder has elected to pay extra and protect the no claims discount."
Your son did not elect to do this. CIS adds that where there is no liability dispute and it has only a third-party claim to settle, it is not required to notify the policyholder.
Questions of Cash cannot give individual advice. Please do not send original documents. Write to: Questions of Cash, 'The Independent', 191 Marsh Wall, London E14 9RS; firstname.lastname@example.org
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