Some Tessa accounts paid a poor rate of interest, but the bank or building society charged you a penalty if you wanted to get a better rate.

The Financial Services Ombudsman says that since 5 May 1999 all variable rate Tessa accounts must have

• paid a "fair rate of interest"     or
   
• allowed complete freedom to transfer elsewhere without penalty.

If your Tessa broke this rule, you can claim compensation from your bank or building society.

Questions you may have:

To be 'fair', the TESSA interest rate must be at least as good as the interest rates available on any other accounts with less onerous features in that bank or building society's current range.

The ombudsman regards TESSAs as five-year accounts. So any bonus payable at the end of the five years is included when the TESSA interest is calculated.

Up to £200 of interest, calculated as follows:

• Based on the difference in interest rates between the TESSA and the other account with less onerous features in the bank or building society's range
   
• Running to the date when the investor was told that they were free to transfer the money without notice or charge
   
• If any bonus is lost because the TESSA is transferred, the ombudsman would exclude the bonus in calculating the TESSA interest rate.

The ombudsman service has said it is likely to award more in case of "real inconvenience and distress".

No. He should have suggested that the offending banks and building societies should write to their customers, rather than waiting for uncertain customers to approach them.

A good bank or building society will write to its customers anyway and tell them that

• it was fair to its Tessa customers so no compensation is due    or
   
• it is working out what compensation will be paid.

If they don't take the initiative and write to you, do they value you?

Write to every bank and building society you've had a variable rate Tessa with since 5 May 1999 asking if compensation is due in line with the ombudsman's ruling. There is a draft letter here.

When you get a Yes or No, tell me and I will post the information here for the benefit of others who might claim.

If they don't reply in 14 days, write again saying you will contact the ombudsman if the matter is not resolved in a further month.

If you are at all unhappy with the response from the bank or building society, ask for a Letter of Deadlock so that you can approach the ombudsman.

The bank or building society may choose a different account for its comparison from the one the ombudsman chooses when a case lands on his desk.

If this happens to you, tell me and I will post the information here.

And if your interest was rolled up in the Tessa, make sure they pay you compound interest ("interest on interest").