Nationwide Building Society · DRN-6247758

The complaint Mr C complains about the administration of a transfer from his stocks and shares ISA to a cash ISA by Nationwide Building Society (Nationwide). Mr C complains that Nationwide made an error which resulted in his transfer being terminated. He says this had an adverse financial impact because he needed the funds for a property purchase. Mr C says he had to source the funds elsewhere which caused him to lose interest on other funds and pay tax on income he withdrew from his personal pension. He also says the value of his Stocks and Shares ISA went down after the transfer should have taken place. What happened On 13 November 2024 Mr C attended a branch of Nationwide and applied to transfer his Stocks and Shares ISA held with another business to a Nationwide Triple Access Cash ISA. That application was unsuccessful. On 15 November 2024 Mr C again attended a branch of Nationwide and made a second attempt to transfer his Stocks and Shares ISA to a Nationwide Triple Access Cash ISA. Nationwide didn’t complete the process properly and so the transfer couldn’t move forward. On 26 November 2024 Nationwide wrote to Mr C and informed him that he would need to sign a document and return it within five working days so that the transfer of his ISA could proceed. Mr C completed the form and sent it in the enclosed pre-paid second-class envelope. The form didn’t arrive within the required timeframe, so the transfer was terminated on 11 December 2024. In January 2025 Mr C signed an agreement for the purchase of a property. It stipulated that approximately 33,000 Euros had to be paid within five working days of the date of the agreement and the rest of the purchase price by a date towards the end of March 2025. Mr C made the payment and has explained he used funds from a personal pension, premium bonds and a savings account to purchase the property because his ISA transfer hadn’t completed. At the beginning of March 2025 Mr C complained to Nationwide. He said he had visited a branch and completed forms to action a transfer from his stocks and shares ISA to a cash ISA with Nationwide, so he could access the money for a property purchase. Mr C said he had received a letter form the ISA team in November 2024 explaining they needed his signature to carry out the transfer. The letter said he should sign and return the document within five working days, so he signed it immediately and returned it but the transfer didn’t go through.

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Nationwide upheld his complaint. It acknowledged that it hadn’t completed the administration of Mr C’s transfer correctly as his documents hadn’t been sent to the correct department. This had resulted in a request to Mr C for documents to be signed and returned and the application eventually being terminated. Nationwide noted the amount being transferred and the interest rate on the cash ISA. It said if the transfer had been carried out without any error, Mr C would have accrued interest on that sum, up until the funds were required to be sent to his solicitor, which was 18 March 2025. Nationwide paid interest on that sum based on the period 15 November 2024 to 18 March 2025 into Mr C’s bank account and offered him £500 for the inconvenience it had caused. Mr C disagreed with Nationwide’s offer of compensation and referred his complaint to our service. He said the amount paid was insufficient and didn’t address the decrease in value of his stocks and shares ISA. Mr C said he had lost thousands of pounds on his investment and said he wanted Nationwide to transfer the stocks and shares ISA at the value he would have received if his request on 15 November 2024 had been actioned and completed. Our investigator considered Mr C’s complaint and thought it should be upheld. She said that Nationwide’s offer didn’t account for losses incurred by Mr C as a result of taking mitigating action or the decrease in value of the stocks and shares ISA that hadn’t been transferred. The investigator considered that if the error hadn’t occurred, Mr C would have used the transferred funds towards his property purchase. However, she noted because of the fall in value of the stocks and shares ISA, there weren’t sufficient funds to replace the withdrawals he had made to pay for the property. So, she said it was not now possible to put Mr C in the exact position he would have been in, had the transfer gone ahead without error but she thought Mr C had incurred losses that weren’t covered by Nationwide’s offer. The investigator concluded that it would be fair and reasonable to treat the ISA transfer separately to the property purchase and the sourcing of other funds for that purchase. She said had it not been for the error, the transfer would have taken place, and the proceeds would have been in the cash ISA on 5 December 2024. So, she said that: • Nationwide should now transfer the stocks and shares ISA to a Triple Access Cash ISA. • Nationwide should calculate what the value of Mr C’s stocks and shares ISA would have been on 5 December 2024 and compare it to the transfer value and if the former was higher the difference should be paid into the cash ISA. • Nationwide should backdate interest from 5 December 2024 at the rate that would have been applicable then minus any interest it had already paid. • Nationwide should pay Mr C £500 for distress and inconvenience if it had not already done so. Mr C agreed with the investigator’s view. Nationwide didn’t agree with the investigator’s conclusions. It said it had acknowledged the error it had made but noted it had sent a letter to Mr C on 26 November 2024 asking for the

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information it needed to complete the transfer. Nationwide said Mr C could have contacted Nationwide at the time to discuss the transfer, inform it that he was due to travel shortly and to check the transfer had been completed. Nationwide said it didn’t think the request to transfer the ISA and backdate the interest was fair as it had already paid interest for the period up until the monies would have been used for the property purchase, and Mr C could have contacted Nationwide but hadn’t done so until he made his complaint in March 2025. Nationwide said Mr C could still have accessed these funds from December 2024 to March 2025, but it had been Mr C’s choice to use other funds to source his property purchase. Nationwide said in a call in April 2025 Mr C had been asked whether he still wished to go ahead with the transfer, but he had said as he had lost faith in Nationwide and the value of his investment had reduced significantly, he no longer wished to go ahead. So, Nationwide said it was unfair to ask it to complete the ISA transfer now, when Mr C had told Nationwide he didn’t want to complete the transfer many months before. Nationwide said if Mr C had indicated at the time that he still wanted the transfer to take place, it would have completed the transfer and backdated the interest. As he hadn’t done so, it had paid compensation based on the interest period from the date of application to the date of the property completion date. As no agreement could be reached Mr C’s complaint was referred to me for review. I considered Mr C’s complaint and issued a provisional decision concluding that it should be upheld in part and that Nationwide should carry out a comparison between the value of the transferred funds on two different dates, plus any interest that would have been earned, minus any interest already paid to Mr C. I also said Nationwide should pay £500 for distress and inconvenience, if it hadn’t already done so. Both parties were given an opportunity to respond with any further submissions. Nationwide acknowledged and accepted my provisional decision. Mr C acknowledged my provisional decision and in summary said: • He was disappointed and with regret accepted the decision. • He said he felt he was still holding a loss because Nationwide made an error by not acting on his request on two occasions. • He didn’t think it was his responsibility to oversee Nationwide. • He had other savings and investments and if Nationwide had administered his transfer application correctly, those investments would have been earning interest. • He did everything correctly but had to incur losses whereas Nationwide admitted it had made an error and didn’t have to compensate Mr C for those losses. • He wanted Nationwide to pay compensation so that the value of his ISA investment was taken back to the value it had been when he decided to transfer.

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• He had already decided to sell his investments a year ago, however he must now monitor his investments and the stock market in order to make a decision to sell those same investments without sustaining a loss. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I remain of the view set out in my provisional decision an extract of which is set out below and forms part of this decision. Provisional decision “What I’ve provisionally decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. It is not in dispute that Nationwide made a mistake when it carried out the administration of an application by Mr C to transfer his stocks and shares ISA to a cash ISA with Nationwide. To recap, this resulted in Mr C being asked to sign further documentation and return that documentation to Nationwide. As the documentation didn’t arrive in time, his application was terminated. Mr C has explained that he returned the documentation promptly, on the same day it was received but he thinks the reason it didn’t arrive in time was the second-class postage and the seasonal impact on post at that time of year. It seems given the time frame of five working days, that providing a second-class envelope didn’t allow much turn-around time which I think is a reasonable explanation as to why the documentation didn’t arrive on time. However, I consider that correspondence put Mr C on notice that there was an issue with his transfer and made him aware that if the transfer documentation didn’t arrive within a relatively short space of time, the transfer wouldn’t go through. So, when three weeks had passed and Mr C hadn’t received any confirmation that the transfer had gone through, I don’t think it would have been onerous to expect him to contact Nationwide to find out what was happening - particularly given these funds were going to be used to fund the majority (approximately 70%) of the purchase of a property. I acknowledge that Mr C has explained that at that time he was out of the country for three months, however that was not something that was in the control of Nationwide. And I don’t think that changes the position that he should have made reasonable efforts to mitigate his loss. If Mr C had contacted Nationwide, I think he would have found out that the transfer hadn’t gone through, more likely than not, in the second half of December 2024. Given the payment for the property purchase had to be with his solicitor by 18 March 2025, that still left sufficient time to start another transfer, or if Mr C had lost faith in Nationwide, to transfer his stocks and share ISA to a cash ISA with another provider. In addition, a further option was that he could have simply sold the stocks and shares and transferred the money for the purchase

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and that course of action would have also locked in the value of his ISA at that time. I appreciate these actions would have been more difficult from abroad but with the use of telephone and email I consider it was reasonably achievable. By not contacting Nationwide, Mr C didn’t give it an opportunity to remedy the error. In addition, it may have been able to prioritise and fast track his application, given the delay it had caused. By the time Mr C contacted Nationwide in March 2025 to complain, he had sourced the funds elsewhere. And as I don’t think on balance that Mr C took reasonable steps to mitigate his loss, I don’t think it is fair and reasonable to say Nationwide should be responsible for any additional costs incurred in relation to his property purchase. In addition, I am not persuaded on balance that the losses Mr C has described are sufficiently close to, and flow from Nationwide’s mistake. Nationwide was dealing with an ISA transfer – from one ISA to another, not a bank transfer of funds for a property purchase. The ISA transfer would go through its administrative system for those types of transfer and if Nationwide wasn’t specifically put on notice (which I don’t think it was here), it wouldn’t be aware that the delay could adversely affect a property purchase. And even if it was, as the transfer time for ISAs is not guaranteed, I am not persuaded on balance that it should be held responsible for those types of costs. So, I am not persuaded on balance that it would be fair and reasonable to ask Nationwide to pay any additional costs incurred in relation to the property sale. I note Mr C has also said there were additional exchange costs relating to the property purchases as he had locked in an exchange rate. I appreciate that he said he took that decision to protect himself from any future changes in the exchange rate which he was, of course, entitled to do. However, I don’t think Nationwide can reasonably be held responsible for those costs. Redress When considering compensation for financial loss, my aim is to put Mr C back in the position (as far as is reasonably possible) as if Nationwide hadn’t made an error with the administration of his transfer. So, if the error hadn’t occurred, I consider it more likely than not, that Mr C would have transferred his ISA within 15 working days of his application being made on 15 November 2024 and Mr C would have received the relevant value of his ISA when the stock was sold in order to carry out the cash transfer. As the investigator has outlined, the assumed date of transfer, taking into account relevant guidelines on ISA transfers, would have been 15 working days from the date of application. That money would have then earnt interest in the cash ISA for a short period until it was transferred out to make the payment on the property purchase by 18 March 2025. Backdated interest I don’t think it would be reasonable therefore to award Mr C backdated interest as if his money had been invested in the Cash ISA until today’s date, because it was Mr C’s intention to use these funds for a property purchase, not to invest in a Cash ISA for more than a few months.

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So, I don’t agree with the investigator that those two things should be treated entirely separately. The property purchase has some relevance as that was the purpose behind Mr C applying to transfer his stocks and shares ISA to a cash ISA with Nationwide in the first place. In addition, the money has since remained invested in the stocks and shares ISA with the potential to make a return. So, I don’t think Nationwide’s error caused Mr C to be unable to earn a return on that money. Unfortunately, because of market fluctuations Mr C has explained his stocks and shares ISA decreased in value, and that was the case when he contacted Nationwide in April 2025 and in May 2025 and in June 2025 when he contacted our service. Value of Stocks and Shares ISA Mr C has said Nationwide’s error has caused him a loss on the value of his stocks and shares ISA. I am not persuaded on balance that Nationwide’s error caused this decrease in value. As I have said, the money was intended to be used for the property purchase in March 2025. After the error occurred, Mr C didn’t proceed with the transfer and remained invested in the stocks and shares ISA with the potential for the value of that investment to either increase or decrease. That was a choice that he was, of course, entitled to make but in the circumstances, I don’t think Nationwide can be reasonably held responsible for what then happened. In a call in April 2025, Mr C told Nationwide that he no longer had faith in Nationwide and the value of his stocks and shares ISA had decreased significantly, which is why he no longer wished to go ahead with the transfer. I can understand why at that point he was not interested in transferring because as he explained, the value of his stocks and shares ISA had fallen by about £30,000 and he was concerned that during the transfer time, the stocks could fall further. So, I understand his reasons for not renewing his transfer application in April 2025, given the fall in value of his stocks and shares ISA. However, prior to that, I think the transfer could still have taken place. Nationwide was responsible for the initial error, but I think that could have been resolved if Mr C had contacted Nationwide at an earlier stage or alternatively contacted another provider. So, I don’t think it would be fair and reasonable to now say a comparison should take place between the current value of Mr C’s stocks and shares ISA and the value he would have received if the transfer had taken place on 5 December 2024. Mitigation of Loss As I have outlined, I consider Mr C should have taken reasonable steps to mitigate his loss. So, I think when considering compensation to put Mr C back in the position he would have been if Nationwide hadn’t made an error, I should also take into account what, it is more likely than not, would have happened if he had taken those steps.

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I think assuming Mr C had received the letter on around 27 November 2024 and posted his response on the same day then waited for the expected timeframe of 15 working days for the transfer to contact Nationwide, that would have taken him to shortly before the seasonal bank holidays. So, taking that into account I think it more likely than not, that his transfer could have reasonably started on 30 December 2024 and been completed on 20 January 2025. The monies would have then earnt interest in the Cash ISA prior to being transferred to his solicitor on 18 March 2025 to be used for the property purchase. On that basis I think a comparison should be carried out between the position if the transfer had taken place on 5 December 2024, and if it had taken place on 20 January 2025. I think a reasonable date for assessing those two transfer values would be the value as at five working days before the respective transfer dates, because the stocks and shares wouldn’t be sold on the first day of the application. The transfer application would require some processing time and administration. In order to calculate any compensation. Mr C would need to give consent for his stocks and shares ISA provider to provide those values to Nationwide. Putting things right Nationwide should carry out a comparison between: A) The value of the transferred funds if the transfer had taken place on 5 December 2024 together with interest on that sum (at the cash ISA rate at that time) from 5 December 2024 to 17 March 2025 B) The value of the transferred funds if the transfer had taken place on 20 January 2025 together with interest on that sum (at the cash ISA rate at that time) from 20 January 2025 to 17 March 2025 So: A – B It should then subtract C) which is any interest it has already paid to Mr C. So A – B - C = D If there is any loss that amount (D) should be paid to Mr C together with simple interest of 8% per year on that sum from 18 March 2025 to the date of settlement. Distress and inconvenience I consider this whole experience would have been very upsetting for Mr C having started the process in November 2024 and expecting the transfer to have taken place in December 2024. I have taken into account that there was a significant amount of money involved and the delay had an impact on Mr C’s plans for his property purchase. So, I think £500 is a fair

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and reasonable sum for the distress and inconvenience caused to Mr C. It is not clear whether that has already been paid to Mr C. If Nationwide hasn’t made this payment, it should do so. And it should note that payment is separate to the issue of financial redress.” I appreciate that Mr C is disappointed with my decision and he is concerned about selling his investments at the right time without making a loss. He has also pointed out that he had already made the decision to sell in November 2024 when he requested an ISA transfer. However, I have considered what is fair and reasonable here and while it is not in dispute that Nationwide made an error, that doesn’t necessarily mean that everything that happens after that error is its responsibility. The losses must be close enough and reasonably flow from that error in order for me to conclude that Nationwide has to compensate Mr C for them. And I also have to consider whether in the circumstances Mr C acted reasonably to mitigate that loss or whether there is something he should have reasonably done to try to limit those losses. As I have set out in my provisional decision, I think Mr C was put on notice that there was an issue with his transfer and I consider there were steps he could and should have reasonably taken to mitigate the impact of that error. And I have concluded that if he had done so, the outcome would have been different. So, while I do have sympathy for his position, I think a fair and reasonable method of calculating any loss is the one I have outlined in my provisional decision. To avoid any confusion, as set out in my provisional decision, the dates for assessing those two transfer values would be the value as at five working days before the respective transfer dates, so I calculate those to be 28 November 2024 and 13 January 2025 respectively. I would like to clarify that any compensation already paid to Mr C by Nationwide for financial loss (described as loss of interest) is relevant for the purposes of the calculation as I have set out in my provisional decision. However, if the calculation set out in my provisional decision doesn’t result in a financial loss and no compensation is therefore payable, that shouldn’t impact any compensation already paid to Mr C. In addition, if Nationwide hasn’t already paid Mr C £500 for distress and inconvenience, it should do so. Putting things right Nationwide should carry out a comparison between: A) The value of the transferred funds if the transfer had taken place on 5 December 2024 together with interest on that sum (at the cash ISA rate at that time) from 5 December 2024 to 17 March 2025 B) The value of the transferred funds if the transfer had taken place on 20 January 2025 together with interest on that sum (at the cash ISA rate at that time) from 20 January 2025 to 17 March 2025 So: A – B

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It should then subtract C) which is any interest it has already paid to Mr C. So A – B - C = D If there is any loss that amount (D) should be paid to Mr C together with simple interest of 8% per year on that sum (D) from 18 March 2025 to the date of settlement. My final decision My final decision is that Mr C’s complaint against Nationwide Building Society is upheld in part. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C to accept or reject my decision before 21 April 2026. Julia Chittenden Ombudsman

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