Bank charges and benefits

[nmj73]

Hi.

Wasn't there a sticky about what to do if the bank's charges are swallowing up your benefit? I've looked everywhere but cannot find it?

NatWest has charged me £38.00 yesterday for bouncing a dd for £37.62. It has taken me £38.00 over my overdraft. my incapacity benefit goes in the bank on tues and £38.00 will be swallowed up. is there anything i can do short term rather than just apply for the charges back as i could do with that money now?

Any help would be much appreciated.

Neil

[rory32]

Hi Neil,

I would suggest you phone your bank and see if they'll refund the charge. The worst that can happen is that they say no.

I would also go into your branch if possible and give them a First Right of Appropriation Letter. A template for this is shown below.

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,

[nmj73]

Rory,

Thanks a lot i'll give that a try.

Neil