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Have Your Say: Banks help themselves

Sterling notes
Do you know exactly where your money is?

The Citizens' Advice Bureau is calling for banks to stop the practice of taking money out of current accounts to pay off other debts.

The organisation has seen a 25% increase in each of the last two years of banks using their little-known about "right of set off".

The consumer body argues that customers often have their benefits taken out leaving them unable to make more important payments.

The banking industry says it treats account holders sympathetically and that the onus is on the customer to let their banks know when they face difficulties.

Have you - or someone you know - had money transferred between accounts without any notice?

Do you think it is unfair for banks to move cash without talking to a customer?

Maybe you feel they are perfectly justified in transferring funds as they see fit.

Let us know.

We asked for your comments, a selection of which are below. The debate is now closed.

MOST RECENT COMMENTS:

The phone calls were so stressful
Hilary, Bedford

My husband and I set up a Debt Management Plan to pay of debts and were advised to include my husband's loan and credit card balance from when we were estranged. These were both with the same bank. My husband didn't believe the bank, with whom he has been for almost 20 years, would penalise him for changing his repayment methods as he was not in arrears with the loan and maintained payments for his credit card. As I set up the DMP he continued to pay the instalments on his borrowings. At the beginning of 2009 the debt management company wrote to all our creditors. The bank immediately took my husband's entire salary and confiscated his card. At the same time they sent a letter saying that they agreed to the DMP payments. Yet in the past week they have harassed him, calling up to 10 times a day; they have suggested that he should not have a joint DMP with me but continue to pay as before. This week they have accused him of being in arrears and that he should settle the whole loan and credit card balance. Fortunately, we have now changed his bank account. I will now change all other bank accounts - our children also have accounts with the bank. The phone calls were so stressful that my husband had to switch off his mobile phone (he works nights) but that didn't stop the text messages that they sent whilst the phone was off.
Hilary, Bedford

I would much rather banks charge people who are overdrawn then me when I am in credit. Let's not forget that this is unauthorised borrowing, writing cheques for money not in your account is fraud. How can people go overdrawn and expect not to pay for it?
Keith Thompson, Bolton

My bank has taken money from my current account five times to pay for a credit card. This was state benefits which I am advised is in breach of the Social Security Act. This protects state benefits and make it illegal for banks to garnishee the funds. In response to a warning of FSA complaint they refunded it, wrote and apologised, but have since done the same thing three times. In addition because there is no money in the account they have applied unauthorised overdraft charges arising because of the funds they withdrew illegally from the account. I had to transfer my benefits to another current account (which fortunately I already had) and am now in dispute with the bank and filing a complaint to the FSA. They are threatening to sue me for the card debt, and clearly I shall counterclaim for the illegal charges. Should be fun. They have no moral conscience whatsoever, prepared to even seize the few quid a week we get on benefits for food.
Mike, Guildford

My son had an overdraft facility and when he lost his job and could not claim benefits, he went overdrawn further than the facility, then charges were put on top, when he received his benefit he could not cash any. He wrote to the bank, and the situation did not change. He was advised by CAB to open a Post Office account, which he did.
Penny Linden, Great Yarmouth

Having several accounts with one bank should not mean the bank has the right to transfer money between these accounts without the customer's permission. If the bank thinks there is a financial problem it should discuss this with the customer and agree an appropriate solution. In any case, what is the point of resolving one problem by causing another?
Jackie Grey, Guildford

The banks will cover their own you-know-whats first
Andy, Ottawa

My wife sold some shares through a British bank, but they messed up the sale, and when they realised, they took money out of her current account to cover the mistake. She sold the shares (properly, this time) through a broker, and vowed never to use a bank for such a transaction again. To be fair, though, they did acknowledge the error and compensated her for the trouble, but the experience was still unsettling. If anything goes wrong in finance, you can be sure the banks will cover their own you-know-whats first, before thinking to cover yours.
Andy, Ottawa

The banks are simply getting us back for making waves over their bonuses - and if they recoup as much money as they can, by fair means or foul, they'll get a nice fat bonus again next year for meeting their "targets"!
Mark, Kingston

Personal finance is simple really, spend less than you earn
Phil McHunt, Northampton

No, the banks are completely justified - all the people here are living way beyond their means and blame everyone else for their predicament. Is it not like minded people like these across the world that have pushed us in to the current financial crisis that we are in now? Personal finance is simple really, spend less than you earn!
Phil McHunt, Northampton

My story is the same as all the others I have read. Please make sure you all complain to the financial ombudsman. My case has been with them for the past two months and they feel I have a good case to complain.
Conrad Fielding, Tiverton

Whilst I accept that banks have to cover operating costs, and also make some profit for shareholders, their consistent money extraction without justification in some cases, makes Dick Turpin look like the tooth fairy!
Michael Black, Mancunia

No money for food that month
Carol Turner, Hounslow

Several years ago I was in a bit of bother financially, I was working hard to get it sorted but my bank took what I had left in my account for food for the month and to pay one small bill, they grabbed what they wanted for my overdue credit card bill, this put me into unauthorised overdraft, they bounced my payment and charged me twice for the privilege. I also had no money for food that month. I tried talking to them but got no co-operation whatsoever.
Carol Turner, Hounslow

My bank has in the past taken silly amounts of £10 from my savings account leaving 40p to reduce an agreed overdraft facility of £5,000 when I was in just £800 into the facility. In the last year I had money taken from my current account to reduce a my agreed business overdraft facility, with the result that my direct debits payable from the current account were not honoured and then they charged me for each direct debit that they refused to pay. More recently I had my credit card account stopped even though I had made all due payments, with an explanation that the bank felt that a long term loan I had with them was putting me in financial difficulty. I had been paying this loan for 35 months and had one payment left. The banks account managers are making decisions that range from the pathetic to the ridiculous. Their decisions have knock on effects and one is that I no longer put my money into the bank. I feel that I have to have a back stop by using another bank to save my money and only feed into the other bank an amount that covers what I need that week for fear that they will do as they please and leave me to sort out the mess again.
John D, Cardiff

If they can do it to protect themselves why don't they do it to protect their customers?
Andrew, Stoke on Trent

There have been times in the past when I've wished the bank would do just the opposite. I hold a current account and a variety of savings accounts and a mortgage all linked together and there have been times when an outgoing payment has been refused because I've reached my overdraft limit yet there has been plenty of money in the linked savings accounts. Why didn't the bank just move the money in from the linked account to cover the extra amount? We're only talking a couple of pounds here. If they can do it to protect themselves why don't they do it to protect their customers?
Andrew, Stoke on Trent

This practice is commonplace, they also have the ability to add charges "double pending". This prevents you from ever closing an account, because if you do, these new debts appear. I ended up paying four payments waiting for these debts to appear... they are noted but not calculated... if you pay in what you think, you cannot close the account "in credit" but risk the debts being more when they appear. We don't need banks in this day and age either, five days to clear funds, yet I can email Australia in less than a second. I hope they fail.
David, Torquay

Their tactics managed to rack me up over £500 in bank charges in less than six months
Ian, Edinburgh

My bank, from August '08 ensured there was enough in my account to pay off my debts to them. This involved them refusing to authorise anything on my account weeks before payment was due. I was charged late payment fees by Scottish Power, Scottish Gas, BT, Capital One & two hire purchase companies because none of my payments to them would be authorised until my bank loan and credit card had been paid. Their tactics managed to rack me up over £500 in bank charges in less than six months, plunging me further into debt and they refuse to acknowledge their actions caused my problems. I applied to get these back claiming some financial hardship as a result of the charges. They declined and told me to wait and have now removed my overdraft, closed my credit card and were at one stage not going to issue me a new card for my current account.
Ian, Edinburgh

I paid off a loan, when offered a reduction as an incentive, to my bank on the 29th December. Since then they have repeatedly removed money from my current account, six times in the last six weeks so far, leaving me unable to pay my rent and frequently going overdrawn. It has caused me considerable stress and a fortune in phone bills as well. I have complained to the financial ombudsman and to the bank, but no luck so far.
Ellie Horwell, London

The banks are really getting ridiculous
Carol, Sully

I'd left sufficient funds in my account to cover my mortgage payment. The payment was due, by direct debit on the 30th of the month. I knew I had bank charges, but they were not due until the 3rd - 4th of the following month. My bank paid my mortgage, but then reversed it to pay the charges. Therefore, there were insufficient funds to pay the mortgage, by just a few pounds. That in turn led to further charges etc. etc... The banks are really getting ridiculous. They advise you to contact and talk to them but when you do, they invariable say there is nothing they can do.
Carol, Sully

My Bank used my partner's expired debit card to pay a subsidiary of the bank for something which we had cancelled several months earlier. As soon as my partner paid some money in to clear the account overdraft as he had agreed it was immediately withdrawn. We have never paid another penny into that account. Have complained many times but they insist their actions were justified.
Linda Goldsmith, Gateshead

The bank... were anything but sympathetic or helpful
Simon Powell, Weston-super-Mare

My bank helped themselves to money from my current account without any notice whatsoever to "offset" my loan account. I was left without enough to pay my mortgage and was forced to obtain a third party loan to meet my usual outgoings. The bank, I might add, were anything but sympathetic or helpful. I issued a formal complaint and received a final response from them advising me that they did not uphold my complaint because they had "followed their usual procedure" and that it is within their terms and conditions that they can do this. Should I not have been able to obtain the loan I would have been left in severe difficulty and unable to pay my mortgage.
Simon Powell, Weston-super-Mare


The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.





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SEE ALSO
External links and helplines
17 Feb 09 |  Moneybox
Debt
23 Aug 10 |  Business
Households have less spare cash
15 Dec 08 |  Business


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