Just a minor victim.

Posted 08/11/2008 - 16:06 by go mann

Start at the beginning, I suppose.

I'm a retired British citizen who moved to Jersey in 2005. I’m ex-military, and I have my military pension paid [and taxed] in UK and deposited in the Bank account I’ve had for decades. All my income is also declared and taxed in Jersey, where I get “dual taxation relief” on any income and savings in UK.

I opened a KSFIOM account in August 2008 ... I needed an instant access account without restrictions, so that I could dip in to pay large bills [like builders, holidays, annual Tax demand]. It would be topped up as the "nominated account" from a Jersey-based bank, who do not allow interest to be "rolled up" in their account [WHY?].

Other tempting factors were a very good rate of interest, a modest depositors compensation scheme in the IOM [I never planned to hold much more than £25k anyway] and the "parental guarantee" from Iceland. We did consider Landsbanki, but my wife thought it was a silly name; Kaupthing Singer & Friedlander sounded much more like a City institution!

And everything went swimmingly ... they even let me make a large cheque deposit by post, because my UK bank would only allow me to do on-line transfers at the rate of £5000 per day. I was quite impressed.

[edit = Interesting: they were the only off-shore bank I've opened an account with that didn't require copies of everything [passport, utility bills etc.] counter-signed by a lawyer or whoever. Any copy of the usual stuff would do, submitted my little old me, without any validation. Clearly they were much more relaxed than every other institution in IoM or JSY or GSY. Hmmm ... in retrospect, that's VERY interesting]

And then ..... OMG!!!



During the morning, I requested on-line the transfer of £5000 by BACS to my London Bank. I needed to cover my builder's work, and get ready to pay my annual Tax demand. I printed the acknowledgement message [Who cares about the environment? I like a hard copy!]

I watched the TV News at 1800 - things are looking bad! After a bath, I logged on to KFSIOM and submitted a CHAPS withdrawal for £20,000. I printed the acknowledgement as usual, and noted as I left the website that both the morning's £5000 and the just-submitted £20,000 were both showing as pending transactions.

That left £6,000 in the account; I felt comfortable with that exposure, and certainly didn't expect the roof to fall in!!

I knew from an previous conversation with Customer Services that the computer did its major updates overnight, so I felt reasonably sure that things were going to happen.

Oh ... the suspense! However, I slept soundly, secure in the thought that I had recovered 80% of my modest deposit with KSFIOM.



After breakfast, I logged on to KSFIOM.
The first thing I noticed was that the £20,000 CHAPS transfer was still showing as a "pending transaction", but there was no sign of the £5000 BACS transaction.

I sent a message on the on-line secure system querying what had happened.
I tried to telephone [no answer, or engaged].

I tried email [never answered]
There was plenty of news on TV and Radio that evening!!

By 1900 that day, by some small miracle, I found that £20,000 of lovely credit had arrived in my UK bank. 
There was still no sign of my £5000, and at this stage the KSFIOM website wasn't giving access to accounts anyway.

Oh, dear, what had happened? Well, of course we all have some vague ideas about that, but to the best of my knowledge there's actually £11,003 sitting out there somewhere [with interest? I doubt it!] probably/possibly!



Fast forward a couple of days, literally ... an unexpected 'phone call from my UK Bank. "I see you have a large lump of money in your current account. Would you like to open a savings account?" I explained where it had come from [she understood!] and, in brief, within less than 10 minutes my new savings account was opened, accessible on-line, allowing instant transfers to my UK current account and vice-versa, and earning [modest] interest. The paper-work followed a couple of days later, but by then I was already using the account for other transactions as well [sorry, IoM, another bail-out of funds on your Island]. THAT'S GOOD Bank service ... shall I give LTSB the credit? OK, I will ... nice one, Horsey!!

Actually, there's probably a bit more of my money out there somewhere, because ...



KSFIOM was my "nominated account" to receive interest from another account I hold in a Jersey institution [it's one of those Scottish ones that have almost the same name: one of them is Royal, mine isn't - which you will see is understandable!]. On 7 October 2008, amidst the flurry of activity, I suddenly remembered that fact, and 'phoned the nice person at McBank instructing them to change my nominated account to my London bank. I was impressed that I'd remembered to do that, and so was my wife!



I was delighted to receive 2 emails from another "Financial Institution" in the IoM with whom I had deposits. They were identical emails ... in fact, they were duplicates of the one they sent me in November 2007 and provided my account opening details AGAIN!! As my balance with them was now £3.73 [following a hasty £nn,nnn exit from IoM Banking completely] I exercised a bit of sarcasm in my response to their "customer service" people, and not for the first time in my dealings with them. Would it be unkind to suggest that "x&x" need to get a grip on electronic offshore banking? I may come back once things have settled, so you can hold on to that £3 for now to make it easy for me to re-deposit without all the paperwork.


Fast-forward to ... THE PREVIOUS "A SCOTTISH BANK"

5 NOVEMBER ... and it's time to check that the routine monthly BACS transfer of interest has arrived in London. NOTHING! I 'phone McBank to check details, only to discover that they were still sending payments to ... KSFIOM!!!!!!!

That is still a "work in progress", but I'm going to be fascinated to know, at next week's meeting with a manager or two:
[a] How McBank managed to transfer my interest payment to a bank that had been suspended from operating almost a month previously?
[b] Why McBank were so unaware of what was happening in the financial world that they never put a computer block on transactions with KSFIOM?
[c] Whether they will allow me to withdraw my 6-figure deposit without giving 90 days notice, so that I can transfer funds to a competent bank at the earliest opportunity ... WITHOUT PENALTY, OK?
[d] What will be their view on my potential discussions with the Jersey Financial Services Commission about my SECOND banking failure with McBank in the last 10 months? Two instructions only, and BOTH were failures!!


So far, as at 8 November ... in my opinion, E&OE and all that stuff ...
1. KFSIOM has collapsed with immense damage to thousands of individual depositors after a worthless parental guarantee.
2. x&x in IoM couldn't operate a stall at a Car Boot Sale.
3. McBank in JSY are incapable of handling customer instructions correctly [2/2, both went WRONG]
4. Horsey has shown initiative and competence and customer service.

It would be funny if it wasn't the only money I'll ever have!



I know this is slightly off-topic on a Kaupthing Blog, but it's MY Blog ... so I'll continue!!

David at McBank replied at some length to my rather pungent email. He actually failed to use the word "sorry", but was "extremely concerned" that I had been let down again. So you should be, David, but "sorry" would have been nice.

Anyway, it appears that:

... My instruction to change the nominated account to receive interest [i.e. NOT KSFIOM] was correctly noted and input into McBank's computer system. However, the "advisor" then failed to "save on exit"!!

... The payment to KSFIOM [which had by then ceased trading] was "made automatically" and that "those funds will now be with the beneficiary bank". Fascinating!

For the benefit of those who use telephone instructions, I would advise you to consider very carefully whether this is a safe way of doing business with offshore banks. You are relying, totally and implicitly, on the bank's keyboard operator actually typing your instructions correctly. My two instructions went wrong for the following reasons:

[a] Some months ago I had placed a withdrawal on 3 months' notice. It was eventually actioned on the due date, but the keyboard operator failed to click a button on the screen saying "3 months notice has been given". That led to exit penalties and loss of interest, and required a lot of email and a face-to-face meeting to resolve.

[b] My recent change of nominated account was correctly input to the computer, but the keyboard operator failed to save the change.

It is clear to me that these bank systems are insufficiently robust, although David at McBank assured me that "This incident highlighted an issue in our procedures ... a review is under way to find a solution to stop this from happening again". Too damned right, David: in fact, you would have thought a MAJOR bank would have put robust processes in place at the outset!

And, "... the relevant departmental manager has been made aware of the seriousness of the issue and that staff have been addressed accordingly". Indeed, but the fault lies much higher up the food chain, because McBank installed an insufficiently robust system that allowed "Tracy" at her keyboard to screw things up yet again.

I shall now start the process of opening a new off-shore account with a different bank, and I will write to McBank to put a large sum on 90 days' notice.


Now, back to Kaupthing Edge (IOM) Limited ... or whatever it may be called when in "provisionally receivershipness", or in the throes of being run-down, nationalised, taken-over, saved by the IMF/Iceland/HMG, exported to iceland or China, or whatever.



Thanks for the comments - all duly noted.

Today is "Diversification Day" ... although I wish I'd noticed the date before I started!!

Today I opened a new account with Abbey/Santander in JSY, providing them with the usual armfuls of documentation to prove I'm not Osama Bin Laden, that I actually live 15 minutes' walk up the road, and that I have £x p/a income from N sources etc. etc.! I could understand some of what the young lady "customer advisor" said ... it was however slightly muffled by the large shiny studs in both her lip and tongue. What a wonderful advert for an International Bank office, having that as your "personal interface". Or perhaps that's just my age showing?

Also today I placed a 90-day withdrawal notice on a large sum currently held with McBank (50% of my deposit with them). I also noticed that my on-line statements shows they have re-credited my account with the amount of the erroneous KSFIOM transfer, and have now correctly transferred the money to Horsey. Where the original KSFIOM transfer on 31 Oct has gone I have no idea [and McBank doesn't really seem to care either]. Perhaps I'll get a statement from PWC or somebody one day, showing the magical appearance of £478.82 on 31 Oct 08 in KSFIOM, even though it didn't exist as a bank. Of perhaps its now with ING? Or KSFUK? Or in Darling's back pocket? Anyway, if I do get it, I've been asked very nicely to let BOS(I) have it back ;-)



Clearly the wheels of Abbey grind slowly because I've heard nothing further from them. Perhaps the compliance department are concerned because I used to live in Surrey?


The letter arrived ... I can open the account! Regrettably committed all day, and the following day as well [collecting our new Rescue Cat, this one with a heart murmour].


Cheque [in envelope] personally walked into Town [in the drizzle] and handed over to the front desk.

Knowing my previous luck with NR, B&B, KSFIOM and BOS, all depositors in Abbey should now be worrying deeply. ;-)


At last ... communication from Abbey, in the form of a statement confirming my fixed deposit at 5% for 1 year. That only took about 3 weeks, but at least Abbey lasted that long. Now I just have to hope they last another 49 weeks, so I can have my deposit + interest back ... oh, no, I'm wrong ...

They have to last 52 weeks, maturity is 4 Dec 09.
Here we go again ... so who had the use of my £30k since 29 Nov?
Some [b]anker had my money for a week ...



Huzzah ... I can now access my KSFIOM statement on-line.
It makes interesting reading, with everything happening on 7 Oct 08.

Paid Out = £5k BACS, £20k CHAPS, £20 CHAPS fee ... as requested on 6 Dec.
Paid In = £5k BACS, £20k CHAPS, £20 CHAPS fee ... put it all back again!
and then ...
Paid Out = £20k CHAPS, £20 CHAPS fee ... ???????? Not that I'm complaining.

And, on 9 Oct, I was kindly credited with £44.34 Interest.
I wonder whether I can ever access it.

Your rating: None Average: 3.9 (11 votes)
Not an option I'd ever

Not an option I'd ever considered!

I'm not sure I want to have to keep going to Turkey to collect the interest etc. etc.
However, a bit of web-searching may be appropriate in case they have a branch in JSY!

Posted by go mann on Fri, 14/11/2008 - 13:44

Go mann, a UK couple who have a place close to mine in France have a accounts in Turkey, very good interest rates, apparently lots of middle east money invested in the banks there, so secure, they holiday there twice a year to collected the interested, change currency and manage the account then return. They were there mid sept and were bringing me the info back so I could have a good look at it --- Ah well.

Posted by skintagainnow on Thu, 13/11/2008 - 14:57
I'm needing somebody that

I'm needing somebody that gets close to matching our local 6% inflation rate, so I can realistically do little more than "harrumph". I have long abandoned the idea of being really selective, and there only about 10 Banks in Jersey I'd even consider doing business with in the first place!

In my position, would you go for 3.5% with Bank of India, for example?

Posted by go mann on Thu, 13/11/2008 - 13:48
Indeed ... regrettably I have

Indeed ... regrettably I have few options if I'm to diversify my holdings, and even fewer if I try to cover 6% local inflation with a reasonable rate of return.

I'm keeping my exposure small for the reasons you mention.

Posted by go mann on Thu, 13/11/2008 - 13:40
I don't understand. Having

I don't understand. Having the pleasure of dealing with an "investment advisor" on MSE who was clearly a petty crook - vote with your feet and FIND SOMEWHERE ELSE. I know that outward appearance means little these days, but don't we have some standards???

I expect in an old fashioned way a base standard in the use of English and dress from the people I interact with - In saying that I am covered in machine oil this very evening, but that is what my employer expects from me, because , blowing my own trumpet, I am very good at what I profess to do.

Posted by Captain Mainwaring on Thu, 13/11/2008 - 13:39
You may wish to review some

You may wish to review some of the comments posted here recently regarding the reliability of Santander or indeed check out credit worthiness yourself as perhaps we should have done 6 months ago with Kaupthing.

Posted by thesunnysouth on Thu, 13/11/2008 - 13:12
And that is the puzzle ...

And that is the puzzle ... which is no longer my problem, as I've been re-credited. It will be interesting [from an academic viewpoint only] to ind where it actually ends up. I can't see it being credited on 31 Oct to my KSFIOM a/c, somehow!

Posted by go mann on Thu, 13/11/2008 - 12:57
I have indeed been

I have indeed been re-credited, so that's OK [see Blog update for 13 Nov].

Incidentally, it's a JSY a/c, so I guess the IoM won't care much!! But your basic point is well taken.

Posted by go mann on Thu, 13/11/2008 - 12:55
but the point is

Well, the payment could - for example - have been a repayment of a loan.

KSFIOM are hopefully still collecting payments on loans that they have issued

So there are any number of reaons why a payment inwards could have been correct

Posted by manx-person on Wed, 12/11/2008 - 13:36
McBank ( IOM ) gave me a fright too

I opened a 3 year fixed rate account monthly interest on Sept 18. A little while after Oct 18th, I noticed no monthly interest had been credited to my nominated UK current account. I had a cold shiver as, of course, this was after 10.8.
Bizarrely, I was reassured to find out the humble cockup to be the origin. Seems to be systematic there.
McBank customer service is really the pits, they assure you that they will respond within 48 hours, then don't respond at all.
I just hope that the operational performance of this sorry shower does not materially influence the bank's solvency until I am able to beat a hasty retreat!

Posted by Martin H on Wed, 12/11/2008 - 13:36
Quite true, and KSF IoM were

Quite true, and KSF IoM were quite meticulous with things like the name on the incoming narrative matching the name on the account - I had one bounce back becuase of that, oh how I regret resending it.

We all know as does Mr PWC that the staff at KSF IoM were well aware of what was going on some time before the big day.

I had two GBP transactions to Indonesia, the first one was received before lunchtime on the day of request and sent on that same day, about 10 days before, and they held on to the money until the third day, and stated that it was quite normal. Should have read the writing then....

Posted by Captain Mainwaring on Wed, 12/11/2008 - 13:22
but the point is

but the point is here - the payment should never have been accepted in the first place - how can an institution with no banking licence, no back office systems accept a payment into the system, should have bounced straight back to the sender.

Posted by skintagainnow on Wed, 12/11/2008 - 13:16
I'm surprised you are even

I'm surprised you are even discussing the point - this one has got to be one of the easier problems to sort, I'd guess you won't need a lawyer and have an almost 100% chance of success.

Posted by Captain Mainwaring on Wed, 12/11/2008 - 13:06
McBank with fries

All you need to ask is for you to be recreidted with the amount and for them to sort out getting it back themselves.
Tell them if they don't you will make a complaint to the Financial Ombudsmen in the IoM.

Posted by manx-person on Wed, 12/11/2008 - 13:00
McBank has replied ...

... an update for those following my Blog.

Posted by go mann on Wed, 12/11/2008 - 12:38
Corrected ... I have no idea

Corrected ... I have no idea why I said that!
Thank you ... I lost "Star Points" there, didn't I !!!

Posted by go mann on Sun, 09/11/2008 - 18:12
Re: Just a minor victim. Wrong dates?

6 October was Monday not Wednesday.
7 October was Tuesday not Thursday.

Posted by Anonymous on Sun, 09/11/2008 - 17:35
I have a sense of humour,

I have a sense of humour, thank God.

I shall, however, rehearse [and subsequently enjoy] the one-sided interview without coffee!! ;-)

Posted by go mann on Sun, 09/11/2008 - 17:06
Useless Banks

I think they are the same in UK as in IOM you just have to keep a sense of humour! If you lose that you are truly lost. I am hoping to be re-united with my money, hopefully in my liftime!

Posted by Janica on Sun, 09/11/2008 - 16:24