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!!PLEASE help with hsbc taking *£150* a month in charges out of benefits


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Please can somebody advise me on what i can do next ...


I have so far rang and sent letters to hsbc about there charges and requesting a refund of them like many people i have been sent the leter your claim and complaint has been logged and stored ect ect..


I have been really ill for the past year and a bit with neurological illness and have been in receipt of incapacity benefit with not being able to work due to illness. I am struggling each month to get but i recieve £196 every 2 weeks (long term incapacity) to get by on to pay bills and rent and to live on.


I recently looked up about the legality of banks taking charges out of benefits and found that they shouldnt be under section 187 of the social security administration act 1992 which states.....



Certain benefit to be inalienable

(1) 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

© child benefit,

and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy of a beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors.


Here is the letter i sent requesting my money back...


Dear Sir/Madam

Unlawful bank charges following an arrestment of welfare benefits – request for refund for XXXXXXXXXXXX sort code: XXXXXX account number: XXXXXXXX

I write with respect to the application of the following charges to my account:Please see list below.

I am of the view that your charges are irrecoverable in law. As you know the monies in my account derive from Incapacity Benefit. This is confirmed from my bank statements.

Social security benefits are exempt from arrestment in terms of section 187 of the Social Security Administration Act 1992. Section 45 of the Tax Credits Act 2002 is an identical provision to the said section 187 of the 1992 Act.

It is therefore trite law that tax credits and other such maintenance or social security benefits are exempt from arrestment. The case of Woods v Royal Bank of Scotland 1913 SLT 1 Reports 499 is authority for the proposition that where exempt monies are paid into a bank account, those monies remain exempt from arrestment insofar as such monies can be clearly identified within an account.

Accordingly, you have erred in law in arresting exempt monies in my account. You cannot impose administrative or penalty charges for your legal error. I would therefore ask you to refund said charges to my account within the next 7 days, failing which I will commence an action for payment and wrongful diligence without any further notice.


With a list of all charges since in reciept of benefits and a total amount requested back.


Also i put on the bottom of the letter this..


All the above charges have been taken while in recipet of benefits. All the charges bellow are charges recieved beofre benefits but due to my financial situation being how it is and not having enough money to live on you are requiered by the court waiver to continue with my case. Under the conditions of the Waiver Banks must:

not take the period during which the Waiver is in place into consideration in any decisions made about limitation periods or time limits for complaints


not make materially adverse changes to the level of charges during the Waiver


do all you can to help account holders avoid incurring these charges in the first place


apply the relevant principle(s) established in the test case when dealing with complaints about charges, and continue to deal with genuine hardship cases during the wavier period.


So by way of the wavier you should still continue with my case without knowing the out come of the test case. Due to the fact i am i reciept of benefits and not having enough money to pay bills and live on. The following charges are those that have been charged from my account before my reciept of benefits started and they are as follows:


followed by a list of charges to my account before benefits..


There reply to this letter was...


thank you for your letter dated 4th feb 2008


You have mentioned that you are presently in financial difficulties we are sorry to hear that.


Turning to your comments concerning the social secrity act1982. If my understanding of the position is correct you allege the bank has unlawfully deducted charges from your account in contravention of S187 of the social security act 1982. It is your belief that the levying of bank fees amounts to an unlawful 'charger' on the benefits you recieve from the state.


As you will appreicate given the nature of your allegations it has been necessary for the matter to be ruferred to the banks legal advisers. Thier consideredview is that your argument is wrong as a matter of construction of the act.


They state;


"you have confused 'charges' in the sense of fees, to which the act has no relevance and 'charges' in the sense of a proprieatryright attaching to benefits to which the act relates, but which the levying of fees on overdrafts does not create".


I acknowledge that your source of income into the account is derivedfrom state benefits paid to yourself however your account is governed by the banks stipulated terms and conditions and by conducting your account as you have then charges have been deducted from your account.


thats there letter they replyed to me with..

is it just me or are they trying to tell me its not charges its fees they take off me then under that quote they refer to it as charges ??


And i dont understand how they can say its the way i have been conducting my account when it is they who have been charging me so much causing me to go further and further overdrawn so they can charge me over and over again month after month after month leaving me with nothing at all to live on


Hsbc charge me on average of £150 a month, They are quick to bounce some of my direct debits and charge me further more but are quick to take there charges out causing me to go further overdrawn with there ridiculous charges of £150 which then in turn swollows up my benefits leaving me with next to nothing at all to live on and with this happening month after month after month it is a never ending loop hole and i do not know what to do next


Please guys any advise you can give me on where i stand with this or what i can do next will be greatly appreciated. I need help desperately


Thanks Chris

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Hiya Chris, they are using the same argument against your allegations as they do against general unlawful bank charges i.e. if you call it something else it will confuse the customer and they will think your right and go away.

I would write to them telling them that whatever they call their penalty charges they are still governed by the social security act, tell them you are giving them 14 days to repay the charges or you will submit a claim to the county court to recover the unlawfully taken money and do just that.


As you are using the social security act you wont have to worry about the test case so you have nothing to lose.


here's the CAG thread on banks taking benifits http://www.consumeractiongroup.co.uk/forum/bank-templates-library/42170-right-appropriation-stop-bank.html



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Thank you for your reply and help pete and i shall draft out another letter to them tonight and get it in the post tomorrow see what else they have to say on the matter.


Thank you so much


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Hi Chris


I would open up another account elsewhere. Nat west do a basic step account, where you could put your money. You need to break the cycle of their charging regime, if you are still being charged.


You're in good hands with Pete.


Good luck




Please be aware of acting on advice given by PM .Anyone can make mistakes and if advice is given on the main forum people can see it to correct it ,if given privately then no one can see it to correct it. Please also be aware of giving your personal details to strangers

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Hey Uk yeah i have thought about opening a new account to have money paid into and i have been told nat west are good and i am in the future going to use them. Thank you for your advice uk i am greatful.


I also forgot to mention in my original post that i recieved a letter today telling me they are going to take out another £158 out of my account on the 4th march in charges due to the fact i have been overdrawn £11 for the past couple of weeks because my benefits were not enough to cover there last charge they took out. Theres nothing like daylight robbery

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Hi Chris, If for any reason you have problems opening an account with the NW then this might be of some use to you.

Do you need a parachute account?


Good luck and keep us posted.



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Hiya Chris, as UK says open up another account to actually run your finances and your life from, and submit your claim to the county court against HSBC.


I wouldn't worry about the charges (overdrawn balance) building up because the more charges they add the larger your claim (or second claim) gets and the only way they can recover this legally is to get a judgment in court.... and thats exactly where we want to go too :D.



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also remove your name chriss just go to edit and blank out your full name







Advice & opinions given by patrickq1 are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional

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Thank you guys for all your help and advice means a lot it realy does better than the people on money saving expert who thought they would turn it into a argument against me Cheers guys



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Hi Chris,l am in same position - my only income is DLA and JSA and the charges that HSBC charge take me over my overdraft limit.

I have tried to get them to increase my overdraft by £500 which would get me clear but this has been refused.

I My problem is that my original claim was based on the Social security admin law which i now know is not applicable -

and i dop not know where to start - your post helped so I will try to keep track of your progress.

From one HSBC claimant :-?to another one.



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I got a reply from Steven 4064 in response to a query I asked on thefoloowing forum located at:


The charges are unlawful, just not under these 2 Acts. You should start a claim using the same method that everyone on CAG uses. It will take a little time because of the OFT case which ended on Friday but the expectation is that you will get them back.


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Yes I can see Stevens point about using soley the Socialy Security Act in a court room however I would still say the deduction of any amount that you dont agree with from a benifit payment is questionable and if you add the unfair terms and conditions statutes to this it will make a very strong claim.



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Ta Pete,

I have just now drafted a letter to HSBC requesting details of charges and interest applied to my account giving 40 days for a reply cos I am not sure which interest charges are applicable.

I am quite concerned about the result of this cos they are already threatening to close my account unless I pay full amount of overdraft or deposit something - which was done cos both JSA and DLA benefits still going into account.

I tried to get some cash from ATM tonight without any joy - what do they expect me to live on???

Can any one advise best bank to try for a "parachute account"?



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Hiya both, here's the full list of what the banks are offering with minimal or no checks, all pretty basic but you have to have a bank account of some sort in todays world :mad: and it helps if your bank doesn't remove all of your money as soon as its paid in.




good luck



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  • 3 months later...

Hi Chris

If you are still having hassle you can get your benefits paid into a post office card account.

You have to get an "Invitation"to set up a card account" letter from the same people who give you the benefit.

In my case i got this from the Jobcentre and when it was set up I got in touch with DWP

and they put my DLA into it too.

You cannot set up Direct Debits or go overdrawn but at least it keeps it out of reach of the bank..

Good look with everythng


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