ING Directs email to
Kaupthing Fixed Term Deposit savers highlights the banks culpability,
and serves as a warning to ING Direct customers
Cheated savers have several courses for redress: the FSA, ASA, the OFT
Lets start here with an open letter to Johan De Wit, CEO of ING Direct UK.
13th November 2008
Dear Mr De Wit,
On behalf of the 2300 Kaupthing Edge savers that opened a fixed term deposit account during October 2008 I would like to extend to you our disgust at receiving an email from ING Direct notifying us that it is reneging on its side of the agreement. It is not acceptible that hard-working families, pensioners, and diligent savers should be penalised for INGs ineptitude and it is particularly suspicious that ING only took action after the 1.5% interest rate cut on 6th November 2008.
ING assured us that we could continue to use the Kaupthing website as normal, and on the website the fixed term deposits continued to be promoted as usual.
As a saver that opened a fixed term deposit in good faith I feel it my duty to correct some misconceptions suggested by the email from your company:
"IT systems that we were unable to disable" - ING claims the fixed rate deposit accounts could not be closed because of this. Yet within days of taking Kaupthing Edge into administration ING was able to access the 'IT systems' such that notices could be posted on the website for all Kaupthing customers to see. This suggests ING had access to these systems. It was therefore, possible for ING to deactivate the fixed term deposits being offered on the website. The Kaupthing website is written using a standard webpage language called Java which connects to a database (such as MySQL or Oracle). The simplest way to deactivate the fixed term deposit application process would have been to remove the icons and text from the webpage - a process that takes minutes.
"Apparent ability to apply for a Kaupthing Edge fixed term deposit" - the use of the word 'apparent' is misleading. Each of the 2300 customers applied online and received confirmation of their transaction, had funds removed from their account, and a deposit account created. Under E-commerce Regulations a legally binding contract had been made which ING has accepted. ING is now attempting to set a new precedence that agreements entered into online do not have to be honoured by ING simply by claiming technical difficulties or an error. This has very serious implications for any ING customer, since ING can break an agreement at any time using this excuse. ING customers cannot have any confidence that their fixed rate products will be honoured.
"your application in respect of the fixed term deposit account cannot be processed" - as with the previous statement this is misleading. Applications were processed online, a transaction ID issued for each, funds debited, account numbers issued, and accounts created. All of the 2300 customers were able to see their fixed term deposit accounts when they logged into the website on subsequent visits.
"Kaupthing Edge was not permitted to accept deposits" - indeed this may have been the case. However, our deposits were with ING Direct. I refer you to your signed statement displayed on the Kaupthing Edge website, "All your savings are safe and are now with ING Direct" - Johan De Wit.
In conclusion, your companys email to fixed rate deposit customers points to a mistake by ING in the administration of the Kaupthing Edge website which resulted in ING Direct breaching the FSA First Supervisory Notice. This is an issue between ING and the FSA; savers should not be penalised because ING failed to carry out its responsibilities. Savers entered into legal online contracts for fixed rate deposit accounts which continued to be promoted on the website. Whether ING Direct was aware that fixed term applications could be made prior to 6th November is in question. If it was not, then the application process ran as normal, approved, and created fixed term accounts. However, if ING was aware, then it suggests ING was prepared to accept deposits but had no intention of honouring products promoted under its administration. This is extremely serious and leaves ING Direct open to allegations that it has defrauded honest savers.
Today we are experiencing a financial environment where banks do not trust each other. If ING Direct fails to honour the fixed term deposits that we opened in good faith, then ING breaks the bond of trust between bank and customer. This leads UK banking down a very treacherous path.
Yours sincerely,
A very disillusioned customer
This website has been produced by an ING/Kaupthing Edge customer. It is not connected with or sanctioned by ING Direct or Kaupthing. Any trademarks and/or registered trademarks mentioned here belonging to ING, ING Direct, and or Kaupthing Edge, Kaupthing Singer and Friedlander, BBC, Advertising Standards Authority, Financial Services Authority, Office of Fair Trading remain the property of their respective owners. The contents of this website does not constitute legal or financial advice.
Cheated savers have several courses for redress: the FSA, ASA, the OFT
Lets start here with an open letter to Johan De Wit, CEO of ING Direct UK.
13th November 2008
Dear Mr De Wit,
On behalf of the 2300 Kaupthing Edge savers that opened a fixed term deposit account during October 2008 I would like to extend to you our disgust at receiving an email from ING Direct notifying us that it is reneging on its side of the agreement. It is not acceptible that hard-working families, pensioners, and diligent savers should be penalised for INGs ineptitude and it is particularly suspicious that ING only took action after the 1.5% interest rate cut on 6th November 2008.
ING assured us that we could continue to use the Kaupthing website as normal, and on the website the fixed term deposits continued to be promoted as usual.
As a saver that opened a fixed term deposit in good faith I feel it my duty to correct some misconceptions suggested by the email from your company:
"IT systems that we were unable to disable" - ING claims the fixed rate deposit accounts could not be closed because of this. Yet within days of taking Kaupthing Edge into administration ING was able to access the 'IT systems' such that notices could be posted on the website for all Kaupthing customers to see. This suggests ING had access to these systems. It was therefore, possible for ING to deactivate the fixed term deposits being offered on the website. The Kaupthing website is written using a standard webpage language called Java which connects to a database (such as MySQL or Oracle). The simplest way to deactivate the fixed term deposit application process would have been to remove the icons and text from the webpage - a process that takes minutes.
"Apparent ability to apply for a Kaupthing Edge fixed term deposit" - the use of the word 'apparent' is misleading. Each of the 2300 customers applied online and received confirmation of their transaction, had funds removed from their account, and a deposit account created. Under E-commerce Regulations a legally binding contract had been made which ING has accepted. ING is now attempting to set a new precedence that agreements entered into online do not have to be honoured by ING simply by claiming technical difficulties or an error. This has very serious implications for any ING customer, since ING can break an agreement at any time using this excuse. ING customers cannot have any confidence that their fixed rate products will be honoured.
"your application in respect of the fixed term deposit account cannot be processed" - as with the previous statement this is misleading. Applications were processed online, a transaction ID issued for each, funds debited, account numbers issued, and accounts created. All of the 2300 customers were able to see their fixed term deposit accounts when they logged into the website on subsequent visits.
"Kaupthing Edge was not permitted to accept deposits" - indeed this may have been the case. However, our deposits were with ING Direct. I refer you to your signed statement displayed on the Kaupthing Edge website, "All your savings are safe and are now with ING Direct" - Johan De Wit.
In conclusion, your companys email to fixed rate deposit customers points to a mistake by ING in the administration of the Kaupthing Edge website which resulted in ING Direct breaching the FSA First Supervisory Notice. This is an issue between ING and the FSA; savers should not be penalised because ING failed to carry out its responsibilities. Savers entered into legal online contracts for fixed rate deposit accounts which continued to be promoted on the website. Whether ING Direct was aware that fixed term applications could be made prior to 6th November is in question. If it was not, then the application process ran as normal, approved, and created fixed term accounts. However, if ING was aware, then it suggests ING was prepared to accept deposits but had no intention of honouring products promoted under its administration. This is extremely serious and leaves ING Direct open to allegations that it has defrauded honest savers.
Today we are experiencing a financial environment where banks do not trust each other. If ING Direct fails to honour the fixed term deposits that we opened in good faith, then ING breaks the bond of trust between bank and customer. This leads UK banking down a very treacherous path.
Yours sincerely,
A very disillusioned customer
This website has been produced by an ING/Kaupthing Edge customer. It is not connected with or sanctioned by ING Direct or Kaupthing. Any trademarks and/or registered trademarks mentioned here belonging to ING, ING Direct, and or Kaupthing Edge, Kaupthing Singer and Friedlander, BBC, Advertising Standards Authority, Financial Services Authority, Office of Fair Trading remain the property of their respective owners. The contents of this website does not constitute legal or financial advice.
Have You Been Affected?
BBC's Money Box and Working Lunch have already been contacted regarding ING Directs actions. If you've received the email from ING Direct regarding your Fixed Term Deposit, please contact the BBC on the following links:
Money Box (use Send A Story link)
Working Lunch
Fixed Term Deposits continued to be offered on the main accounts page of the Kaupthing Edge website whilist under ING administration. The Trading Standards Office and Advertising Standards Authority accepts complaints for misleading advertising or promotional claims.
Trading Standards Office (find your local office)
Advertising Standards Authority
Making a complaint online
ING Direct is regulated by the Financial Services Authority. You can submit a complaint to the FSA here
FSA: Making a complaint online
If you deposited money in a fixed rate deposit account and you believe ING had no intention of paying the agreed interest rate, then you can report it as an investment scam to Consumer Direct (part of the Office of Fair Trading):
Report an investment scam
Serious Fraud Office