An HSBC customer of 44 years in South Wales was left unable to pay off her £125,000 mortgage after more than £16,000 she tried to transfer from a Post Office Isa into her HSBC account went missing for 15 weeks.
The customer, known only as C.W., had planned to clear the remaining balance on her mortgage at the end of August, when her fixed rate deal expires, using money gathered from savings held elsewhere. She began moving funds into her HSBC cash Isa at the start of the tax year, including the Post Office transfer, which she initiated on April 22.
The trouble started when she tried to complete the transfer online. HSBC's form listed the Post Office among its approved Isa providers, but it would not accept the 10-digit roll number on her account, instead demanding a 12-digit number and sort code that did not exist for a Post Office Isa.
She contacted HSBC for help several times. One call handler told her to enter "XX" as the final two digits, which worried her since Post Office account numbers can contain letters as well as numbers and she feared it might belong to someone else's account. That fix did not work either. She was eventually told to visit a branch and fill out a paper form, which she did in Bridgend on April 22.
The money left her Post Office account shortly afterwards but never arrived at HSBC. She called HSBC Premier customer service repeatedly, lodged three official complaints and wrote a letter to the bank's chief executive, but nobody could tell her what had happened to her savings.
Wider Isa transfer chaos at HSBC
C.W. was one of a number of HSBC customers caught up in lengthy Isa transfer delays that have affected the bank since April. At the start of the new tax year, HSBC began offering new customers up to £1,000 in cash incentives for opening a Premier current account and transferring a large Isa balance from another provider.
The offer triggered a surge in applications that appears to have overwhelmed the bank, leaving some customers waiting far longer than the 15 working days in which Isa transfers should normally be completed. In late May, another HSBC customer told This is Money she had waited more than six weeks for her £52,000 in life savings to be transferred, after the online form also failed for her and her rural location meant the nearest branch was a five-hour round trip.
C.W. was not even eligible for the cash incentives, since she was already an HSBC Premier customer and the account she was transferring into was an existing Isa, not a new one. She simply wanted to consolidate her savings tax-free while she waited for the date to pay off her mortgage.
Sleepless nights over mortgage deadline
As the weeks passed without her money, C.W. grew increasingly anxious that it would not arrive in time to redeem her mortgage. Paying off a mortgage at the wrong time can be costly: too early while still in a fixed deal risks early repayment charges, while missing the end of a fixed term means rolling onto a lender's standard variable rate, which at HSBC currently stands at 6.24 per cent.
She said the uncertainty gave her sleepless nights. After 15 weeks with no resolution, she contacted Helen Crane, This is Money's consumer champion. Shortly afterwards, the £16,000 turned up back in her Post Office account, putting her straight back to square one.
HSBC resolves the transfer
After Crane raised the case with HSBC, the bank acted quickly and a senior employee called C.W. directly. "I asked why it took so long for this to get to him and pick up the phone to me, he said it was due to my referral to the Daily Mail," she said. HSBC completed the transfer within days.
In a phone call, a representative told her the Isa transfer had been "abandoned" by accident by an HSBC employee.
C.W. has since paid off her mortgage, with HSBC agreeing to let her do so early and waiving any early repayment charges. The bank paid her £500 in compensation, on top of £175 she had already received for her earlier complaints, and paid £167 in backdated interest on the money that had been stuck in transfer limbo. She was also sent a hamper from Fortnum & Mason.
An HSBC spokesman said: "We're very sorry for the difficulties our customer has experienced with completing an Isa transfer. We are pleased to confirm this process is now complete. In recognition of the inconvenience caused, we have offered compensation and have backdated all interest."
