Not upheld: Account administration errors complaint against Assetz SME Capital Limited

Decision detail

Summary

Mr B complained that Assetz unfairly sought to impose an ISA Transfer Fee of £35 and had charged Lender Fees on his Innovative Finance ISA account, arguing both fees breached Section 9.1 of the ISA T&Cs which states amendments adversely affecting investors will not apply to sums already lent out. Mr B had approximately £40,000 lent out in loans at the time of the fee announcements. Assetz argued the ISA Transfer Fee only applies to repaid funds available for withdrawal or transfer, not to funds still invested in loans, and that the Lender Fee applies under the general platform T&Cs which run alongside the ISA T&Cs. The ombudsman found that the ISA Transfer Fee is transactional in nature and cannot practically be charged on funds that cannot be withdrawn, and that the ISA T&Cs are designed to address ISA-specific issues rather than general platform fees. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Section 9.1 of the ISA T&Cs, which states amendments adversely affecting investors will not apply to sums already lent out, does not prevent the ISA Transfer Fee from being introduced. The fee is transactional in nature and only applies to repaid funds available for withdrawal or transfer, not to funds still lent out in loans. The ombudsman reasoned that Term 9.1 is a general provision covering any changes to T&Cs, and the ISA Transfer Fee cannot practically be charged on funds that cannot be withdrawn. Regarding the Lender Fee, the ombudsman found that the ISA T&Cs run in conjunction with the general P2P lending T&Cs rather than replacing them, and the Lender Fee was a platform-wide charge applying to all investors. The ombudsman rejected Mr B's argument that the ISA terms should supersede the main platform terms, finding that the ISA T&Cs are designed to address ISA-specific issues such as tax and subscription limits, not general platform fees.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website