Can they do this?

[spudder]

We have now entered into a DMP and they have this week contacted our creditors with offers of payment. I have opened a new bank account as my previous bank is one of the people we owe.......my partner has so far remained with her bank (lloyds) and she has no direct debits set up on her account. She owes on a lloyds mastercard and we are wondering if they would take money from her account to pay the monthly instalments on this - we assume they cannot as they have no authority from her to do so, but can someone confirm this is correct, otherwise she will have to move her account or the family tax credit which gets paid into it will have to be paid into mine. Thanks in advance for any help.

[Ell-enn]

Hi there, it might be best to check the terms and conditions with the Lloyds mastercard. I seem to remember one of the banks (Barclays I think?) have a t&c whereby they can take money from your bank account to cover credit card payments. I'm sure someone with more experience will be along shortly to advise.

 

Kind Regards

 

Ell-enn

[sussex1]

lloyds took money from my current acount to service the unpaid payments on my credit card before they agreed a payment plan. Not sure if they were entitled to and did not fight it as it was before I was aware I actually had rights

[DustyMiller]

Under right of “set off” the bank may look to do just that. They can look at taking monies from one account to pay another. There are conditions that have to be met and can be found here.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/40/40_setoff.htm

Hope this helps.

[rory32]

As has been previously stated the bank have the right to off set. It would be best if your partner opened another bank account with another bank or even a post office account. Basic bank accounts can be opened quite quickly with either no or very minimum credit checks. For more information about basic bank accounts have a read here

[Santos L Helper]

We have now entered into a DMP and they have this week contacted our creditors with offers of payment. I have opened a new bank account as my previous bank is one of the people we owe.......my partner has so far remained with her bank (lloyds) and she has no direct debits set up on her account. She owes on a lloyds mastercard and we are wondering if they would take money from her account to pay the monthly instalments on this - we assume they cannot as they have no authority from her to do so, but can someone confirm this is correct, otherwise she will have to move her account or the family tax credit which gets paid into it will have to be paid into mine. Thanks in advance for any help.

 

Hi spudder

 

As a matter of urgency I would get your partner to move everything to your account for now and then open up a basic bank account of her own.

 

Whether she gives permission or not be aware that her bank will remove funds to pay her credit card. It is called the right to offset and all banks have this hidden away in their terms and conditions.

 

They do not care if it is tax credits, sickness/invalidity benefit, whatever, they will take the money they want. I have read too many horror stories about people losing the only money they had for food for a whole month and then receiving unlawful charges because the bank had swiped whatever they wanted before anything else was withdrawn from the account, so the downward spiral into deeper debt occurs.

 

You may be thinking surely they cannot do this and because I have been a loyal in-credit customer for donkeys years they wouldn't dream of doing this to me......wrong!

It is nothing personal, purely business, but once they get an inclination that something is not as it was concerning your finances, they will nail you to the floor and make sure they get everything first.

 

Right, thats my rant over, I haven't said all this to scare you, just to make you aware of what will happen.

 

How do I know all this?

 

Its been happening to me since last June:x

 

Kind regards

 

Santos

[Santos L Helper]

In the time its taken me to write the above, the cavalry has arrived:D

 

Santos

[spudder]

Thanks to everyone for their advice, i will get her to open a new basic account quickly and remove any money in the lloyds account for now.