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Cash ISA transfer times set to be slashed

Cash ISA transfer times set to be slashed

Category: Savings

Updated: 29/06/2010
First Published: 29/06/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Cash ISA customers are to benefit from increased transparency over interest rates and far shorter transfer times.

A 90-day investigation has been concluded by the Office of Fair Trading (OFT) after a super-complaint by the Consumer Focus group, specifically concerning transfer times, transparency of rates and introductory bonuses.

Around 17.5 million Britons hold a cash ISA – making it the second most popular account behind current accounts – with some £143 billion invested in them.

The OFT has secured agreement from the financial services industry to:

• Publish clearly the interest rates on the face of cash ISA statements - around 15% of customers currently receive statements that include their interest rate, but from early 2012 all statements will include this information, and;
• Revise industry guidelines on how long cash ISA transfers should take: down from 23 to 15 working days - this will come into effect from 31 December 2010.

The OFT has also asked providers to ensure that that, if delays occur, consumers are no worse off than they would have been if the timelines had been met.

Despite being a bone of contention with many customers, the OFT judged that bonus rates were not causing substantial harm to consumers since the existence of such rates is made clear, as is the date that the bonus period expires.

The OFT said that greater transparency and quicker transfers will help consumers to know their interest rate so that they can compare offers, and switch to better deals more easily and quickly if they wish to do so.

"The reforms to the ISA market are a welcome boost for savers, many of whom lost vital interest through the delays in transferring ISA money between providers," said Michelle Slade, spokesperson for Moneyfacts.co.uk.

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