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HSBC-Social Security Administration act 1992


darreninnz
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My partner contacted HSBC bank about charges coming out of her account.

She stated that whilst she recieves child/working tax credits the bank are not allowed to take any charges from the account because the Social Security Administration act 1992 section 187 forbids it.

 

It was interesting that after only one phone call to her local branch she recieved a letter from ( someone has mentioned him before ) General Manager UK Operations Jim Large.

 

His letter stated that amongst other things the following paragraphs--

 

"As you will appreciate given the nature of your allegations it has been necessary for the matter to be referred to the bank's legal advisers. Their considered view 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 proprietary right attatching to benefits to which the act relates, but which the levying of fees on overdrafts does not create".

 

I acknowledge that the only source of income into the account is derived from state benefits, however your account is governed by the bank's stipulated terms and conditions and by conducting your account as you have then charges have been deducted from your account".

 

 

 

A few things grab me in this letter, i.e.

 

Earlier in the letter he states the Act is from 1982 not 1992.

"Their considered view"--I'm not interested about their considered view.

It states that she's confused between charges and fees and yet mentions at the end that "charges have been deducted" etc. LOL

 

 

I'd be interested in other peoples advice on the reply i should give to this garbage. I sort of know the reply i'm going to give but still would appreciate any input.

 

Many thanks

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HSBC are 100% correct. SSAA 1992 does NOT apply to bank charges.

.

FSA Waiver on Bank Charges:http://www.fsa.gov.uk/pages/Doing/Regulated/Notify/Waiver/pdf/dir_quart_0709.pdf

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But i thought the end of the Act states:

 

" And every agreement to assign, or CHARGE such benefit shall be void and on the bancrupcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors".

 

Thanks for your reply-- Do you think i'm barking up the wrong tree? I'm quite new to this so it's all a huge learning curve.

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But i thought the end of the Act states:

 

" And every agreement to assign, or CHARGE such benefit shall be void and on the bancrupcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors".

 

Thanks for your reply-- Do you think i'm barking up the wrong tree? I'm quite new to this so it's all a huge learning curve.

 

I'll explain or rather I will quote a response to a number 10 petition cos the explanation is better, perhaps. The response also was about the Tax Credit Act 2002.

 

"The purpose of the Social Security Administration Act 1992 Section 187 and section 45 of the Tax Credits Act 2002 is to prevent people’s benefit money being at risk by it being assigned over to a third party in settlement of a debt. It is not intended to prohibit the application of bank charges. Bank charges are in the nature of an expense, and are incurred by the holder of the account; tax credits and benefits are payable in order to help customers meet their expenses, and as such it is legitimate for banks to deduct charges from the balance of an account held in that bank, whether the money paid into the account comes from tax credits, benefits or other sources, such as earnings."

 

I don't think that site rules allows me to link to it but it is the best explanation for it.

.

FSA Waiver on Bank Charges:http://www.fsa.gov.uk/pages/Doing/Regulated/Notify/Waiver/pdf/dir_quart_0709.pdf

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Thanks for that Yourbank, I'm going to find a way of ripping the bank off instead now ha.

 

Seriously-thanks for your prompt reply.

If you have got bank charges and they have impacted on your ability to pay priority debts(mortgage/rent, council tax, utilities) then you could go the hardship route on bank charges.

.

FSA Waiver on Bank Charges:http://www.fsa.gov.uk/pages/Doing/Regulated/Notify/Waiver/pdf/dir_quart_0709.pdf

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Hi darreninnz, welcome to the forum :)

 

Thanks for that Yourbank, I'm going to find a way of ripping the bank off instead now ha

 

Mike is right that you should consider a Parachute account , to get your benefits money paid into a completely different bank . This is an acccount which you should use for your everyday Income and Expenditure, but don't go overdrawn .

 

Parachute Account

 

http://www.consumeractiongroup.co.uk/forum/general/13832-do-you-need-parachute.html

 

It gives you space to work out how you're going to proceed with HSBC , but if they've been applying crippling Bank Charges , you should start reclaiming them .......

 

That will put your account with HSBC 'In Dispute' .... which is a completely different ball game .......

 

Come back if you need more info on this darreninnz , someone will answer and as you've found out already , we're a friendly lot on here :D.

 

But first - the parachute !! LOL

Nemo me impune lacessit

 

 

Advice & opinions given by johnnymitch 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.

 

 

If you think I've helped you please feel free to tickle my star :-D

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  • 4 months later...

Heya Darreninnz, my jaw just dropped when I read your post. I too have THE SAME LETTER identical, word by word, from Jim Large as I, like your partner, am in receipt of State Benefits of which they are taking a hefty slice off with charges/fess. After having done some research I feel it is time to close the account with HSBC, find (if there is any) some where ethical to bank with (only for a £5 weekly direct debit that I see myself forced to pay to HIGH COURT ENFORCEMENT DEBT COLLECTORS and deal with HSBC via another route ie- reclaiming bank charges. It worked for another account with HSBC where I had all charges except 1 returned and I closed the account!

 

State benefits can be received via mail and cashed at your local post office. I think its the way to go. The less we rely on banks/loans and the like the more we will have for ourselves. It is all a [problem]! Check out BBC5.tv eyePlayer - Money & Debt and learn all about it!

 

United WE Stand

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