Bank Charges on Benefits

[littlesally]

Not sure where to post this as I could not find a benefits thread.
I work with the homeles, most of which are on benefits.
Recently I helped one of the girls get her charges back. It was only one charge and after a few phone calls to NatWest, quoting bits about it being illegal to take money from benefits, the refunded.
Now I am helping a man try to get £38 refunded from RBS.
So far all RBS have said to him is - don't phone, go in to your branch.
Then in branch said it was rubbish and they can take benfits.
He took in something I found about it saying they couldn't/shouldn't but they still said that it is not true.
The branch said to phone but the answer would still be no. They said as the benefit was late being paid in, he should claim the charge from the DSS.

As he only gets about £50 a week you can imagine the hardship this has caused. He has not been able to pay the daily £2.50 we charge at the nightshelter (the council insist we charge this) so has had to sleep on the streets.

I have looked for a letter about claiming back benefit money, but can only see one about tax credits, and can't find the extreme hardship letter - although I believe that is meant to be sent before the money is taken.

Any help will be much appreciated, greatfully recieved and much needed.

Sally x

[f7200]

Hi Sally,
I dont work for RBS but I expect that all banks are the same in most ways! Why did the man you are helping get charged in the first place, was it due to returned DD or going over an agreed over draft? It make a difference what the charges were for!
Alex

[littlesally]

Oh, sorry missed that out.
He set up a standing order for £5 to be transferred from one account to another (both his) It was the first transfer. He has now cancelled and will do it himself.

Saly x

[f7200]

He needs to go into the branch - they will try to fob him off! The bank i work for would say the same thing that if the credit was late then the charges should be claimed from the creditor. This is because they dont want to do the paperwork!!!! However RBS like all banks have the ability to remove charges as good will gestures, especially as it was an internal (made to an account within RBS banking system not for example HSBC)transfer that was missed. Sound like you need to corner a cusotmer service advisor in branch even the manager will do and ask them to review the account. The should be able to refund especally if this is the first time its happened. If not then formally ask for a refund in writing also requesting a copy of their complaints procedure, If they still insist on charging him then ask for a right of appropriation to stop them taking the charg out of benifits that are paid in to the acct whilst you make a complaint. Might also help to mention you if pushed will inform the FSA and banking ombadsman and drop a hint to a local news paper especially in light of recent trend to claim bank charges back! Good Luck with them, good luck to the man your trying to help as well!

Alex

[littlesally]

But is the taking of benefits legally wrong, and is there a letter saying this?

Sally x

[rory32]

But is the taking of benefits legally wrong, and is there a letter saying this?

Dear Sir/Madam,

Bank Charges and Benefits and the First Right of Appropriation

ACCOUNT NUMBER: xxxxxxxxx

I am writing to you following several charges debited from my account totalling £xxxx on (date).

Bank charges are unlawful penalties for breach of contract. However, the bank or building society is only allowed to charge you what it costs to cover their administrative charges. If they charge you more than this, you may have a legal right to get back the difference.
Notably, and in my instance, if the income in an account comes from benefits, they are also contrary to the legislation relating to benefits. If the income is from incapacity benefit, job seekers allowance, etc , they are contrary to section 187 of the Social Security Administration Act 1992. The working of this Act comes under the Treasury and the Department of Work and Pensions, respectively and are quoted below for your immediate attention.

Social Security Administration Act 1992
Miscellaneous
Certain benefit to be inalienable **

187- Subject to the provisions of this Act, every assignment of, or charge on-
(a)benefit as defined in section 122 of the Contributions and Benefits Act;
(b)any income-related benefit; or
(c)child benefit,
and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors

When you open an account with a bank or building society and use their services, you are entering into a contract. The law says that the bank or building society must carry out its business:-
• with reasonable care and skill.

If the service is unsatisfactory you may be entitled to compensation if the contract has been broken. I believe that there has been a breach of contract as I feel your organisation has failed to handle my affairs with reasonable care and skill.

This failure on your behalf has caused me a great deal of hardship. I am left with no means to pay the rent/bills due to the unauthorised amount now outstanding. The incoming amounts due to be deposited into my account next week will only clear the amount outstanding leaving little if any to pay the rent, for housekeeping or utility bills such as gas.

I ask for a little compassion and request that the benefit amounts totalling £xxxx, debited in order to pay for your default charges, be refunded by return.

I am also writing to inform you that I am due to have the following payments made into my account:-

• Tax Credit payment of £xxx on xx/xx/xx
• Child Benefit payment of £xxx on x/xx/xx
• Incapacity Benefit payment of £xxx on x/xx/xx

Totalling £xxxx,

I wish to use my first right of appropriation for this money, for the following purposes;
Rent £xx
Utilities bills £xx
Housekeeping money £xx
I will withdraw the money on the day that it is deposited for the above use, and I would be grateful if you would ensure that any other payments out of my account do not interfere with this withdrawal.

Yours faithfully,

[littlesally]

Thank you,

Sally x

[littlesally]

Ok, have left a letter for him to collect, but made a few changes to it as he is on Income Support - I am guessing that the law covers that as well - and his outgoings do not include utility bills or housekeeping money, but laundry, bus fare to apply for jobs and view flats/bedsits and lunch.
Hope that's right,

Sally x

[rory32]

made a few changes to it as he is on Income Support - I am guessing that the law covers that as well -

Yes, income support is an income related benefit as defined under s123 of the Social Security Contributions and Benefits Act 1992.

[sisternumber1]

finally found something about benefits and bank charges, so to would be grateful to know which benefits are protected from being taken as penalties etc.

OK I understand that invalidity benefit is an income related benefit, where does DLA fit into this, is this also a benefit that should not have charges taken? the person in question gets - Invalidity Benefit - long term rate, DLA at full level for both parts and housing benefit, she has a notional right to claim income support, but because of the other benefits does not get any (there is a letter to this effect somewhere).

any advice and pointers greatly appreciated.

[rory32]

OK I understand that invalidity benefit is an income related benefit, where does DLA fit into this, is this also a benefit that should not have charges taken?

Yes. They can use their First Right of Appropriation for this.

[sisternumber1]

thank you rory - now have some more ammunition to get things sorted for my daughter! Cant believe how much they have taken from her in the months that she has been so very ill and not able to deal with her finances, and it has all snowballed to what appear to be unmanageable proportions.

[littlesally]

RBS wrote back and said until the test case they are not paying out any requests for charges.
He has sent another letter pointing out that they must have mis-interrupted the letter as the request was for benefits back and the test case has nothing to do with that.
Also inclosed a break down of out goings and said it is the first charge ever incurred.
Worded it as a friendly letter rather than a legal type.
Sally x

[trollstar]

watching this thread with interest, thankyou

[sillygirl1]

RBS are a nasty lot to deal with at the moment. They really are abusing their powers so I think perhaps a full written complaint to the FSO would be in order, the case clearly isn't linked to the Test Case and the bank are breaching their obligations.

I'd also advise your friend to try to get a NatWest Step account set up - it's a basic bank account and should give him a cash/debit card to use.

[littlesally]

This is taking a little longer than it should as the person concerned is homeless and tends to dissappear for a few days or a week at a time.
There is what looks like a reply from RBS waiting for him,
Sally x