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Page last updated at 14:38 GMT, Saturday, 24 May 2008 15:38 UK

Barclays refuses full ISA refunds

By Paul Lewis
BBC Radio 4's Money Box

The front of a Barclays bank
Barclays' Andy Gray promised "great customer service"

Barclays Bank has apologised to thousands of customers after long delays in opening its Tax Haven cash ISA.

But the bank says it will not pay interest back to the date of the application, as customers were warned the process might take some time.

It says customers will have to wait up to 14 days before interest will be paid on their savings.

The bank blames the administrative problems on the huge demand.

Barclays' stance

We did advise customers... to expect delays
Catharine French, Barclays

Barclays' retail customer service director, Catharine French, told BBC Radio 4's Money Box programme,

"I'd like to start by apologising to customers for the delays and the very real frustration that's caused.

"For the second year running we've received record levels of applications for our ISA.

"We did of course plan for an increase but we just didn't expect demand to be this high."

She said that customers had been warned to expect delays and that would limit the time for which interest would be backdated.

"We did advise customers when they took out an ISA to expect delays.

"We're aiming to open all ISA accounts with 14 days so [where] it's taken longer than 14 days we will be backdating the interest for [only] that period."

Interest delay

Barclays confirmed that no interest would be paid for up to 14 days after the application was received.

It's been a miserable experience...
Valerie, Money Box listener

So if a customer went into a Barclays branch to apply for an ISA on 6 April 2008, but the bank took longer than 14 days to open it, no interest would be paid until 20 April.

For someone who paid in the full 3,600 that would cost them almost 9 in lost interest.

Last year applications for Barclays' Tax Beater ISA were also subject to long delays.

This year it promised Money Box that "customers can expect great customer service" after the system was "re-engineered".

But many customers have experienced problems.

Customers' frustration

Valerie contacted the programme to say:

"It's been a miserable experience... the account wasn't opened for several weeks."

And Philip e-mailed from Oxford after his ISA was opened for the wrong tax year.

When he complained he was told he would have to wait until 24 June for a full reply.

"It surprises me that Barclays don't have adequate systems in place to deal with the ISA investment season.

"It surprises me even more they don't have adequate systems to deal with customers' queries and complaints."

The rate on the Tax Haven ISA was 6.5% until 30 April when it dropped to 6.25%.

That includes a 1% bonus which lasts for a year.

Last year's Tax Beater ISA now pays 5.18%.


BBC Radio 4's Money Box was broadcast on Saturday, 24 May 2008 at 1204 BST.

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23 May 08 |  Moneybox


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