Paragon Bank Plc · DRN-6226860

The complaint Ms R complains on behalf of the late Mr G’s estate about the information it provided in respect of an ISA with Paragon Bank Plc after he passed away. What happened The late Mr G held a Limited Edition Easy Access Cash ISA which was opened in March 2017 and had a rate of 1.07%. In February 2022, Ms R told Paragon that Mr G had passed away and it wrote to her giving her the options for this account, in light of his passing. In July 2022, after receiving the Grant of Probate naming her as the executor or her late husband’s will, she confirmed that she wanted the ISA to ‘continue’ on behalf of the estate, which she thought was the best option open to her. In August 2023, Paragon sent a letter to Ms R by mistake asking for instructions for her late husband’s ISA. It accepts this was sent in error, although Ms R replied to say that she had made her previous instructions and stood by these. This then prompted her to look into the matter more closely and Paragon then confirmed the correct situation. Over the next few months, Ms R continued her enquiries and in February 2024, complained on behalf of her late husband. She says she hadn’t been appropriately informed about the account and added that the rate had decreased and was now particularly low. Paragon responded to the complaint to say that the account was a continuing ISA and so it hadn’t written to her regularly. It confirmed that the rate had actually increased rather than decreased. Ms R wasn’t happy with Paragon’s response and so she brought her complaint to this service, where one of our investigators looked into it. They found that Paragon was entitled to have set the rate as it did on the account and that the communication it had provided around this in February 2022 was clear about the nature of the continuing ISA account and how it would operate. They also found that subsequent communication had been clear around the product too. The investigator noted that Paragon had compensated Ms R for some service failings and felt that what it offered was fair. Ms R didn’t agree or accept what Paragon was offering to now resolve the complaint. She maintained that there was a lack of information given to her about the interest rate and that there was a lack of clarity around the transfer arrangements. The complaint was passed to an ombudsman to decide. 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. When Ms R let Paragon know of Mr G’s passing, it responded to explain what options were open for Mr G’s ISAs ahead of a Grant of Probate being received. At the time it sent this letter, the relevant regulations included those requiring businesses to pay due regard to the interests of its customers and treat them fairly, along with paying due regard to their

-- 1 of 3 --

information needs and communicate with them clearly, fairly and in a way that isn’t misleading1. While Ms R has referred to the Consumer Duty – a higher set of standards for consumer protection implemented by the Financial Conduct Authority (FCA) on 31 July 2023, that wasn’t retrospective and so didn’t apply at the time the relevant letter was sent. The options given were that the account could be closed or could ‘continue’ for up to three years until 2 January 2025 – an arrangement known as a ‘continuing ISA’ under HMRC guidance. If the account continued as a continuing ISA, then while it would benefit from the tax advantages afforded by an ISA, no further deposits could be made and the account couldn’t be transferred to another ISA manager. Ms R says she interpreted this to mean that the account couldn’t be transferred to another provider, regardless of which option she took. While I can see why she may have read it that way, I also have to be fair to Paragon and consider the evidence here from an independent and impartial position. In my view, that sentence is clearly included within the context of the explanation of what will happen if the account becomes a continuing ISA. Paragon’s letter goes on to clearly explain that it doesn’t offer Additional Permitted Subscriptions (APS)/Spousal ISAs and so if Ms R wanted to claim those subscriptions with a new provider as a part of that arrangement, then she would need to send Paragon certain information and the details of the new provider and an APS transfer form from them too. Ms R says that Paragon should have done more to explain the APS position fully and accurately by explaining what APS is, what limit there was and where she could exercise this right with another provider and what the timeframe is. She states that she was vulnerable in line with the Financial Conduct Authority’s definition of customers in vulnerable circumstances and I agree that she would have been at the time. Even accepting that though - I don’t think Paragon was under any obligation or duty to offer such detail in these circumstances. In any event, it explained what she should do if she wished to pursue this with a new provider – which I think is a reasonable way of signposting her to the next steps needed if she wanted to take this action. Paragon was clear that any responsibility for claiming APS would lie with a new provider and would require Ms R to contact one. This letter clearly explains her options and it was for Ms R to contact Paragon if she had any further questions about its contents. I note Ms R’s comments about the letter not providing her with any information about the interest rate on the account in question here. I can see why it would have been helpful for Paragon to have included that – and I note she asked for a ‘statement of [Mr G’s] accounts’ but it was under no obligation to provide the interest rate in its letter of February 2022. In sending this letter, Paragon provided its standard information in response to such a request, adapted for the specifics of the late Mr G’s accounts. If Ms R didn’t know what the interest rate was, then she could have asked Paragon before telling it that she wanted to continue the ISA. Paragon was only required to provide the details of the interest rate on the account in certain statements and if Ms R requested it. When she did this later in February 2024, it provided that information, so I see no reason it wouldn’t have also done so in February 2022, had she asked. 1 FCA Handbook, PRIN 2.1 The Principles, 6+7, https://handbook.fca.org.uk/handbook/prin2

-- 2 of 3 --

In any event, it seems that Ms R had formed the belief that the interest rate on the account was 3.50% based on the fact that it stated that interest earned was £3.50. That’s clearly an honest mistake, but equally it’s not a reason I can say that Paragon acted unfairly here. I think ultimately what happened here is that Ms R had a lot to contend with at the relevant time and so didn’t fully appreciate or consider the contents of Paragon’s letter in respect of what was best to do with the late Mr G’s ISA. I do understand why that will have been – but where the information provided was, in my view, clear about the options and status of the ISA, I can’t fairly say that Paragon should be held responsible for the losses she is claiming for on behalf of the estate. Overall, I think the information Paragon provided was presented in a way that was clear, fair and not misleading. It gave Ms R sufficient information, in a clear way, to understand the options in respect of her late husband’s ISA and to make an informed decision on what she wanted to do. Ms R feels strongly that the letter could have been worded more clearly, with more details and specificity. But where the letter explains the options open to her in a clear way, I’m satisfied Paragon has acted fairly. In respect of what happened after this – it’s clear that the service Paragon provided fell short for Ms R at what would have been a difficult time for her. But in saying this – I have to consider that ultimately the eligible complainant here is the late Mr G’s estate. For the service failings here it paid Ms R £55 and has offered a further £95. That compensation was made in relation to issues that would have impacted Ms R here rather than the estate and so I won’t address that other than to say it looks to be a helpful gesture. Should Ms R now wish to accept the remaining compensation, then she is free to contact Paragon to do so. But I won’t be telling it to take any further action here. My final decision I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask the estate of Mr G to accept or reject my decision before 28 April 2026. James Staples Ombudsman

-- 3 of 3 --