You never opened an account, you know

Posted on 12 November 2008 in Money (4 comments)

Seems the whole Kaupthing Edge clean up continues. It's taken them some time, but it finally came - the email that says "Yes, it may look like you opened a fixed term savings account, but you didn't. Sorry."

It appears that whilst the Kaupthing Edge accounts were transferred to ING Direct, the actual physical infrastructure of the online banking system didn't - it was kept by Kaupthing Edge's parent, Kaupthing Singer & Friedlander. Technically opening a new account via the online banking system was therefore opening a new account with Kaupthing Singer & Friedlander, who are in administration and therefore can't accept new deposits.

Apparently the money, when they get round to closing the account, will be deemed "never to have moved in the first place".

Presumably I'm not the only person to have tried this little game but it provides a lesson for failed banks (or at least the people trying to run failed banks) - lock off what you can, as soon as you can, even if it's a crowbar approach. Cos if you don't, someone may expect something to be possible that's not, and you'll waste more time sorting out the mess.

One failed bank did do that. Notably when Icesave shut its doors, one of the first things it did was put a crude but simple redirect meant that any attempt to hit the "Apply Now" link, sent you somewhere much safer (for the bank) - their homepage.

Update: 13 November - the saga has now made a story on BBC News. Apparently 2,300 people got caught up in this. Meanwhile, my money has returned back to the original savings account although it seems to have completely confused the online banking system which appears to be unable to add up correctly and is showing (on one page) my balance to be less than it is (the other pages show the balance correctly) - don't ask me...

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Shaun said:

This does seem a bit underhand of them. They didn't really accept a new deposit, it was a transfer between systems. The homepage of the Kaupthing Edge site clearly said all these funds were now within ING. The e-mail I received claimed they only managed to disable this feature on the 6th November (conveniently on the date the base rates dropped really low!) and even then they only disabled it such that it said "Server Error" if you tried that link, as I did.

Posted on 13 November 2008 at 11:23 AM

Andrew Bowden said:

I suspect what actually happened was they only realised people were opening accounts on 6 November. They really should have sorted that out a lot sooner than they did.

Posted on 13 November 2008 at 2:00 PM

Andrew Bowden said:

So according to BBC News, there were 2,300 of us who got caught up on this...

Posted on 13 November 2008 at 3:25 PM

Nigel Moors said:

I too transferred a large sum (20K) to KE just 2 or 3 weeks I think before the banking debacle - driven I must say principally by fear of the (then UK only it seemed ?) banking crisis - the KE high interest rate naturally appealed also.
I too regard the continuance of the old KE website in near-unchanged form with some bemusement - for my two-penneth I would really have expected ING to have moved a lot more quickly here - removed this site, moving accounts "properly" to their own site....


Posted on 28 November 2008 at 11:35 AM

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