Lex’s ISA investments were worth less by the time her bank sold them

Investments ISAs Covid-19

Lex’s ISA investments had fallen by £8,000 in value by the time her bank received her postal request to sell them – which had been delayed due to the Covid-19 pandemic. We decided the bank’s offer of compensation was fair – but said it should have done more to explain price fluctuations and timescales, and that the complaint could have been prevented had it done so.

What happened

Lex contacted us after she’d had problems selling some shares contained in her stocks and shares ISA.

Lex explained she’d contacted her ISA provider, her bank, which had told her she’d need to put the request in writing to her local branch. She said she’d also been told the value of her shares as they stood that day.

Lex said that she’d gone to her local branch later in the week to submit the request to sell her shares, but was told there that she’d have to send the request by post. Lex had then posted the request, but with the impact the pandemic was having on the post network at that time, the bank only received the request two weeks later.

Lex told us that, by this time, the value of the shares was almost £8,000 lower than when she’d first enquired with her bank. When she couldn’t get through to the bank on the phone, she decided to complain.

In its final response letter to Lex, the bank said it was sorry for the difficulty she’d had trying to get in touch with its helpline, and upheld her complaint. It agreed to put her in the financial position she’d have been had her letter been sent via the bank’s internal mailing system the day she went into the branch.

At this point, the market value of the shares Lex wanted to sell, while still lower than when she first enquired, was higher than the nearly £8,000 loss she’d incurred by the time the bank had processed her request. The bank had also offered Lex compensation for the distress and inconvenience she’d experienced.

Lex told us she remained unhappy, as she wanted the bank to honour the initial withdrawal price. So she asked us to look into her complaint.

What we said

While the bank had upheld Lex’s complaint, we needed to investigate whether the redress it had suggested was fair.

When we asked the bank for its thinking, it explained that, for security reasons, it had to receive written confirmation before shares could be sold. It could take three to five working days for a request of this nature to be processed from the point it was sent. Because of this, the bank had tried to put Lex in the financial position that she would have been in had the shares been sold within three working days.

While we understood Lex’s frustration, we explained that it wouldn’t be fair for us to tell the bank to pay the value of a quote given before the shares could reasonably have been sold.

However, while we thought the bank had done the right thing in terms of redress and compensation, we felt the complaint might have been prevented. In particular, we told the bank that it could have clearly, and at an earlier stage, explained to Lex why the initial price quoted would differ from the price she’d get when the sale had been completed. If it had done so, she’d have been less likely to expect to receive the originally-quoted price.

We noted the bank had also apologised to Lex about her not being able to get through to the helpline – which it explained was due to the impact of the pandemic on its operations. We felt the compensation the bank had already offered was a fair reflection of the inconvenience that was within the bank’s control, and explained this to Lex.