Questions of Cash: Watching your online account can stop fraud

Q. Tiscali, the internet service provider, has instructed Nationwide building society to open a direct debit on our bank account, without having contacted us or obtained our agreement. We do not buy any services from Tiscali and cannot get a reply from Tiscali to explain what has happened.
IS, Faversham.

Q. Tiscali, the internet service provider, has instructed Nationwide building society to open a direct debit on our bank account, without having contacted us or obtained our agreement. We do not buy any services from Tiscali and cannot get a reply from Tiscali to explain what has happened.
IS, Faversham.

A. We have spent weeks trying to get an explanation from Nationwide and Tiscali, but neither can provide a satisfactory answer as to how the direct debit instruction on your bank account came about. Nationwide's spokesman says: "There has been a human error somewhere along the process which led to the direct debit being set up by mistake." But he does not believe that error to be Nationwide's.

Nationwide says that Tiscali should have a copy of the direct debit instruction. Tiscali says it does not, but it believes this may be an example of an attempted fraud, with the fraudster being the potential beneficiary. We now understand that you spotted this before any payments were made. You deserve congratulations for keeping a careful eye on your online bank account, but you need to maintain diligence.

Q. My wife and I own our house, but each of us still owns the flats we lived in before we married. We each lived in our own flat for more than five years. They are being rented out, but we are thinking of selling one. What tax would we have to pay if we did?
HN, by e-mail.

A. Paul Falvey, tax partner at the accountant Grant Thornton, says: "Your private residence is exempt from capital gains tax (CGT). Now that you have more than one property, you and your wife should choose which property is your private residence: you have two years from the house purchase in which to do this. As you are married, if you decide to choose your house, your wife must also choose the house. Your flats may therefore be liable for CGT.

"Any gain is time-apportioned into periods during which the flats qualified for private residence relief and periods during which they did not. As you lived in the flats for the five years before you moved into your house - without having any other private residence at the same time - the gain attributable to that period will be exempt from CGT. Most importantly, private residence relief is available for the last three years of ownership, whether or not the property is your private residence at that time. If you decided to sell both flats within three years of moving into your house together, there would be no CGT arising on either sale."

Q. In 1987, Abbey National sold two Scottish Amicable endowment policies, one to my partner and another to me, to support our joint mortgage. We were not warned the repayment could fall short of the target. About 18 months ago we were told that each policy could fall short by up to £1,500. Scottish Amicable said that any complaint should be directed to Abbey. We complained of mis-selling in June last year to Abbey, but despite repeated letters we have not been advised of an outcome. In May this year we wrote to Abbey again and received a reply saying: "I will retrieve your file from storage and forward it to a consultant, who will contact you when the investigation is complete." Does this mean that Abbey is not considering mis-selling complaints, but leaving people to complain to the Financial Ombudsman Service (FOS)?
PB, Glasgow.

A. You should not jump to the conclusion of conspiracy rather than cock-up when it comes to endowment complaint handling. All the banks, building societies and insurers that sold endowments have struggled to handle the volume of complaints, as has the FOS. In your case, Abbey accidentally filed your complaint as resolved when it was still outstanding and only realised this when your letter was received in May.

"It is certainly not policy to ignore complaints and [make customers] refer them to FOS," says an Abbey spokesman. Doing so would put Abbey in great difficulty with the Financial Services Authority (FSA).

The bad news is that Abbey has rejected your claim. It can find no evidence that it recommended endowments to you: it says that in 1987 it did not provide advice on alternative methods for repaying a mortgage. Abbey says performance information was supplied by Scottish Amicable, to whom complaints should be submitted. You can lodge a complaint with FOS, which will initiate on your behalf a request for a formal investigation by Scottish Amicable. If both deny liability, the FOS will review your claim against them. Whether your complaint is upheld may partially depend on what evidence you hold about information supplied by the two companies. Scottish Amicable has been fined by the FSA for endowment mis-selling and has agreed to review past cases, but only going back to 1988. Abbey is offering you £250 for the delays in handling your complaint.

* If you have questions, write to Questions of Cash, 'The Independent', 191 Marsh Wall, London E14 9RS, or e-mail cash@independent.co.uk We can reply only to letters published. Please send copies, not originals.