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Help required on Bank Charges whilst on benefits **SUCCESSFUL OUTCOME**


JP08
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HI

 

My Son inadvertantly went overdrawn by £20. He is on Jobseekers allowance. He did bury his head in the sand for a while through ignorance, but when I found out, I sent them a letter about the social security act 1992.

£100 has been paid in to his account by his sister, which I think is a good deal of interest on £20 already. They want more though (another £187).

 

Whilst it was in dispute they sent the account to their debt collector. So I sent them a letter of dispute (Not heard back on that yet) but the response from the bank after asking for details of his income was that they cannot refund any of the charges because regular deposits were going in to his account, prior to him being on Jobseekers? No Money has gone in to that account since this £20 was overdrawn but they are saying it would not be considered under the financial hardship guidelines?

His Joseekers is paid in to his savings account.

 

I am going to go through their complaints procedure but can anyone advise me on what I can say? They seem to be ignoring the social security act.

 

Thanks

JP08

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I'm not sure I understand their logic.

 

They cant pay back the charges because regular deposits were going in BEFORE he was on Jobseekers allowance ?? I would ask them to clarify EXACTLY what they mean.

 

Meanwhile there is a letter in the following link that you could send to them. I would be inclined to have your son set up a parachute account with a different bank and if he has any standing orders or direct debits with this current bank, cancel them.

 

http://www.consumerforums.com/resources/templates-library/86-debt-collectors/580-letter-when-bankdca-attempt-to-collect-on-penalty-charge-situation

 

HTH

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Advice & opinions given by citizenb 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.

 

PLEASE DO NOT ASK ME TO GIVE ADVICE BY PM - IF YOU PROVIDE A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER ADVICE THERE:D

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Just some swift questions here. It's usual after 6 months has expired for debt collectors to be involved. You would also be made aware of what would happen as they progress by letter. From what you have said it would seem that the initial debt is not new so a few more details and what actually happened might be useful.

Somewhere in the small print there will be a clause that states they can move funds from an account with funds to repay the one that requires them. I would be surprised how JSA managed to be paid into a savings account as normal payments are by BACS and into a fully accesable 'current' account unless otherwise agreed. JSA by the way is taxable and counted as 'income' for that reason. You'll even get a P60 for the inland revenue for it at the end of the tax year. Contribution based JSA lasts for 6 months only and then means tested for 'income based'.

I think with all the details and time elements there are many here who could suggest and advise you accordingly.

MIchael

  • Haha 1

When I was young I thought that money was the most important thing in life; now that I am old I know that it is. (Oscar Wilde)

--I like to be helpful wherever possible however I'm not qualified in this field. I do consider carefully anything important (normally from personal experience) however please understand that any actions taken are at your own risk--

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Hi Citizen B

Thank you for this, I will send them the letter you advised. I do not know the logic in what they have said either.

Michael, in answer to your questions, yes the intial £20 overdrawn was before xmas, not sure how long, but it had not got to the debt collectors until after the £100 had been paid to the account and I had written a leter to the bank stating about bank charges and the social security act 1992 section 187, which says they cannot take charges from his benefits as it is money he will need to live on . Their refunds department sent a means form which of course would only be for his JSA payments. And I sent that back to them. The reply was what I had put in my first entry.

 

The savings account is called a smart account, money can be paid in by any means to it, but he cannot have direct debits etc. the flex account they are talking about is only a basic one and should not have an overdraft on it anyway. So the fact that they let it go overdrawn in the first place is weird. I have not heard back form the Debt Collectors who I believe are in house anyway yet on the letter of dispute. Will cross that bridge when and if they come back.

 

I will send off this letter and see what they come back with now

Thank you both for your help !!!

JP

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  • 2 weeks later...

Hi

I received a reply to my first letter (account was in dispute) from the debt collectors. They came up with an offer saying to pay some off, no actual amount shown and that they will partially clear the default on his credit file and no more would have to be paid, he would just have to call them within 7 days to fnd out how much they would take off.

I sent them the second dispute letter and also stated that the debt was made up entirely of bank charges, but have not heard back on that one, even though they sent another letter stating as they had not heard the offer had been withdrawn.

 

I have also sent letters to the credit ref agencies and a dispute letter to the bank as well that you advised Citizen. I am still waiting on a reply to that one as well.

I will keep you posted.

Thanks again for all the advice

JP

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They will in fact be showing on the credit file a different amount in the 'default/delquent' box. That's nowhere near what you want as it'll still show as default. The problem is that it'll show for 6 years unless totally removed and it's only the the account holder (as in the bank) who can alter it.

The notice of dispute will last 28 days or until the bank reply either way. The reality is that a bank hates to adjust CRA entries once made. They believe they are always right which we all know is often in dispute.

You need take no rush to contact the DCA and you need to find out if it's 'in house' or 'external' and if the debt has been sold which is probably doubtful. Whatever happens your aim is to have the 'default' removed. By the sounds of it you have mitigating circumstances so there's a reasonable chance of them (reluctanly) backing down.

Whatever you do from now on, write down everything as in names, dates and times and the jist of your calls be they incoming or outgoing. Think I'm right in what I've said here.

Michael

  • Haha 1

When I was young I thought that money was the most important thing in life; now that I am old I know that it is. (Oscar Wilde)

--I like to be helpful wherever possible however I'm not qualified in this field. I do consider carefully anything important (normally from personal experience) however please understand that any actions taken are at your own risk--

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Hi Michael

 

I have still not heard anything back yet, but the DCA is inhouse at the moment according to the letter. They haven't tried calling yet, but I will list the calls if they do.

Thanks

JP

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JP any offer to reduce the outstanding balance you want in writing. So no phone calls to them :D

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Uploading documents to CAG ** Instructions **

 

Looking for a draft letter? Use the CAG Library

Dealing with Customer Service Departments? - read the CAG Guide first

 

1: Making a PPI claim ? - Q & A's and spreadsheets for single premium policy - HERE

2: Take back control of your finances - Debt Diaries

3: Feel Bullied by Creditors or Debt Collectors? Read Here

4: Staying Calm About Debt  Read Here

5: Forum rules - These have been updated - Please Read

 

 

BCOBS

 

2: Does your Bank play fair - You can force your Bank to play Fair with you

3: Banking Conduct of Business Regulations - The Hidden Rules

4: BCOBS and Unfair Treatment - Common Examples of Banks Behaving Badly

5: Fair Treatment for Credit Card Holders and Borrowers - COBS

 

Advice & opinions given by citizenb 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.

 

PLEASE DO NOT ASK ME TO GIVE ADVICE BY PM - IF YOU PROVIDE A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER ADVICE THERE:D

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Thanks Citizen

 

I received a letter back from Experian basically stating to request a copy of his credit report after sending them the letter which says about defaults on credit ratings that are made up purley of bank charges. It goes on to say more but says any queries once the credit report is received to go back to them. I will request that and then see what is actually on it, as the internal DCA had said that there was a default on his credit rating?

Will update after that

Thanks

JP

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JP08 ... that'll cost you £2 for the credit report snail mail. However they are doing a 30 day on line tempter for free so that might be an idea.

The credit report will at least show when the account became 'deliquent' and the overdue periods logged at it progressed. It certainly sounds to be well over 6 months of 'no action' though and you might like to have a close look at the default notice they'll have sent.

The banks normal reaction is that if there's no overdraft facility agreed and dependant on how much below zero would define the charges. Personally I'd have been on the phone to them immediately because not doing anything about it means the charges continue to pile up - aka the nightmare scenario.

Michael

When I was young I thought that money was the most important thing in life; now that I am old I know that it is. (Oscar Wilde)

--I like to be helpful wherever possible however I'm not qualified in this field. I do consider carefully anything important (normally from personal experience) however please understand that any actions taken are at your own risk--

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Hi Michael

Thank you for this, I will do the 30 day online version. My son also received another letter back from the bank after the last letter. It is basically saying that although the refund request is currently on hold pending the outcome of the OFT test case, it does not prevent them from continuing to collect outstanding balances through it's collection process. They will be happy to discuss an arrangement if he calls their collection team. Obviously not going to call them but they have already had the £20 back plus £80 in charges. They are still accruing more charges every month currently another £187 and counting. His Jobseekers is not being paid in to that account. But with the charges still being added on even after the letter of dispute, I am wondering just how much it is going to rise to. I will go through their complaints process now.

Will keep you updated

Thanks JP

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Hi Michael

Thank you for this, I will do the 30 day online version. My son also received another letter back from the bank after the last letter. It is basically saying that although the refund request is currently on hold pending the outcome of the OFT test case, it does not prevent them from continuing to collect outstanding balances through it's collection process. They will be happy to discuss an arrangement if he calls their collection team. Obviously not going to call them but they have already had the £20 back plus £80 in charges. They are still accruing more charges every month currently another £187 and counting. His Jobseekers is not being paid in to that account. But with the charges still being added on even after the letter of dispute, I am wondering just how much it is going to rise to. I will go through their complaints process now.

Will keep you updated

Thanks JP

 

So your (you/)son has paid £100 into the account at an earler date but it did not bring it back into credit? HSBC penalties are under £10 a £10 charge and over £10 then a £25 charge. Letters of Dispute will not stop the charges because they will take them as being valid and correct. There would have been an original transaction that 'triggered' the 1st ever 'penalty'.

HSBC prior to applying charges send a letter to that effect. Has you son actually been given a default notice from them or is that default for something else? I get the impression that the default you mentioned earlier is for something else.

Michael

When I was young I thought that money was the most important thing in life; now that I am old I know that it is. (Oscar Wilde)

--I like to be helpful wherever possible however I'm not qualified in this field. I do consider carefully anything important (normally from personal experience) however please understand that any actions taken are at your own risk--

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Hi Michael

Yes, £100 was paid to the account after finding out that he had a problem. We also requested that the rest of the charges be refunded to bring the account back to zero, as my son is on jobseekers. They ignored that saying that before the charges started he was having regular payments paid in so they were not going to refund them. He is at the moment getting no money at all apart from crisis loans as there is some problem with the DWP records. This account is Nationwide not HSBC?

He has had 2 letters from the internal debt collector saying it is in default and that it is affecting his credit rating, it is purely bank charges as the £20 has been paid off plus £80 in charges already.

JP

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Hi Michael

Yes, £100 was paid to the account after finding out that he had a problem. We also requested that the rest of the charges be refunded to bring the account back to zero, as my son is on jobseekers. They ignored that saying that before the charges started he was having regular payments paid in so they were not going to refund them. He is at the moment getting no money at all apart from crisis loans as there is some problem with the DWP records. This account is Nationwide not HSBC?

He has had 2 letters from the internal debt collector saying it is in default and that it is affecting his credit rating, it is purely bank charges as the £20 has been paid off plus £80 in charges already.

JP

 

Well NW charge £20 a month for unauthorised overdrafts plus interest. If there was a DD/SO that caused this then an extra £30 too. Have you seen the Credit report yet? If I remember rightly the one you use will send you a snail mail (once only) activation code. Once you've looked at the credit file it should show everything and all make sense.

As far as their answer, they are really not interested in the slightest regarding when JCA started. Their simple rules are that it went into 'negaive' balance then the charges were added automatically. The real problem is time span.

Let's know what the results are. From that we can look at all the options and potentially sort it out. You have put in a claim though for unfair charges, as in the thing that's being heard by the Law Lords on 23rd instant - If not get that done - Loads of info on other threads of what it's all about and how to do it.?

 

Michael

Edited by InformedSearcher

When I was young I thought that money was the most important thing in life; now that I am old I know that it is. (Oscar Wilde)

--I like to be helpful wherever possible however I'm not qualified in this field. I do consider carefully anything important (normally from personal experience) however please understand that any actions taken are at your own risk--

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Hi Michael

No, I have not got the credit reports yet, however I have sent off the complaint, I will be getting the reports shortly

Thanks

JP08

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Oh thought you were getting the on-line free deal?

The problem though is regarding the continuing monthly 'charge'. It will not stop however until a decison is made. It's that Credit File that's important to this as if their charge was £80 then that means 4 months had passed. Being on JSA or whatever (which I suspect after 6 months stopped) will not be a factor when they automatically enter the charge monthly. One would assume that the monthly £20 charge ceased once the account was declared 'in default'? Who did you make your complaint to?

Michael

When I was young I thought that money was the most important thing in life; now that I am old I know that it is. (Oscar Wilde)

--I like to be helpful wherever possible however I'm not qualified in this field. I do consider carefully anything important (normally from personal experience) however please understand that any actions taken are at your own risk--

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Hi Michael

I am going to do the on-line free deal but have not got around to it yet as I have had to sort out a lot of other things as well. The complaint has been sent to NW. Still waiting on a reply. I am not sure what is happening on JSA as he has not been on it for 6 months this time, however there is some kind of decision going on, which seems to have stopped his benefits at the moment. The unfair charges has been logged with the bank and confirmed as on hold until the decision.

I will get round to the credit files this weekend.

JP

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Okay, well regarding JSA (in a nutshell) - one gets it for up to 6 months (contribution based). Then depending on their circumstances a means-tested income based method (if applicable) is used which will mean nothing(!) or something and advice.

Now for the results of the credit file, eagerly awaited.

Michael

When I was young I thought that money was the most important thing in life; now that I am old I know that it is. (Oscar Wilde)

--I like to be helpful wherever possible however I'm not qualified in this field. I do consider carefully anything important (normally from personal experience) however please understand that any actions taken are at your own risk--

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Hi Michael

 

We received an unexpected result. When I complained to the bank, they reviewed the postion and have agreed to write off all charges going back to Sept 2008, and then close the account. As it was all charges that leaves a balance of zero to pay. So the credit file should show as settled? Still not got round to checking yet as he wasn't there at the weekend but it should change anyway if there is an entry on there, I am sending off the acceptance to the bank at lunchtime today.

 

Result!

Thank you for all your help.

JP

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Oh brilliant news. Do you have a new account if they have closed that one ?.:D

Have we helped you ...?         Please Donate button to the Consumer Action Group

 

Uploading documents to CAG ** Instructions **

 

Looking for a draft letter? Use the CAG Library

Dealing with Customer Service Departments? - read the CAG Guide first

 

1: Making a PPI claim ? - Q & A's and spreadsheets for single premium policy - HERE

2: Take back control of your finances - Debt Diaries

3: Feel Bullied by Creditors or Debt Collectors? Read Here

4: Staying Calm About Debt  Read Here

5: Forum rules - These have been updated - Please Read

 

 

BCOBS

 

2: Does your Bank play fair - You can force your Bank to play Fair with you

3: Banking Conduct of Business Regulations - The Hidden Rules

4: BCOBS and Unfair Treatment - Common Examples of Banks Behaving Badly

5: Fair Treatment for Credit Card Holders and Borrowers - COBS

 

Advice & opinions given by citizenb 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.

 

PLEASE DO NOT ASK ME TO GIVE ADVICE BY PM - IF YOU PROVIDE A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER ADVICE THERE:D

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Hi Michael

 

We received an unexpected result. When I complained to the bank, they reviewed the postion and have agreed to write off all charges going back to Sept 2008, and then close the account. As it was all charges that leaves a balance of zero to pay. So the credit file should show as settled? Still not got round to checking yet as he wasn't there at the weekend but it should change anyway if there is an entry on there, I am sending off the acceptance to the bank at lunchtime today.

 

Result!

Thank you for all your help.

JP

 

Great news! Pleased to hear the news and 'good on you'. Maybe they decided (at last) to look at accounts on their merits?

Regarding your credit file - You payment (or free starter) gets a single 'call' for the file and any others cost you. The file is not updated. 'Before' you send the acceptance ensure the word 'default' is removed from it (if it is there)!

Michael

When I was young I thought that money was the most important thing in life; now that I am old I know that it is. (Oscar Wilde)

--I like to be helpful wherever possible however I'm not qualified in this field. I do consider carefully anything important (normally from personal experience) however please understand that any actions taken are at your own risk--

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Hi Citizen

Yes he does have another bank account a basic one but that is all he needs at the moment. Thank you again for all of your help on this. :)

JP

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One of the credit ref agencies has written saying that they are investigating why a default is on his credit file when the debt is in dispute and have added a note of dispute to it. If the bank do not give a satisfactory answer then they will take it off his credit file...

I await the next response. They are writing it off, so should clear this as well.

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One of the credit ref agencies has written saying that they are investigating why a default is on his credit file when the debt is in dispute and have added a note of dispute to it. If the bank do not give a satisfactory answer then they will take it off his credit file...

I await the next response. They are writing it off, so should clear this as well.

 

Is there a chance you could show this letter here (hiding of course all the personal details)? Individual details shown on CRA files are entered by the account holders (in this case the bank) and it would be amazing to see a CRA overide what is effectively their clients entry data. In other words it's not the CRA's data to change or delete.

Michael

When I was young I thought that money was the most important thing in life; now that I am old I know that it is. (Oscar Wilde)

--I like to be helpful wherever possible however I'm not qualified in this field. I do consider carefully anything important (normally from personal experience) however please understand that any actions taken are at your own risk--

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Hi Michael

 

I have not got access to a scanner but this is what it says.

Thank you for your recent enquriy on share information held on your account.

I can confirm that we are currently investigating this matter with Nationwide on your behalf.

A notice of dispute has been added to the relevant entry on your file and if we are unable to resolve this dispute within 28 days. The entry in question will be suppressed from your file until a satisfactory resolution is reached.

In the mean time, if I can be of any further assitance please write to me etc.

Sorry, I should have said suppressed before, but to me if no one can see it it means the same thing. I sent all 3 the letter about notice on defaults on bank charges alone.

JP

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