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Hardship Bank Charges Lateral Thinking


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I have recently had a converstion with the Council Tax people to see if I was eligable for a reduction on Council tax. They told me I wasn't , because my Working Tax Credits made my income up to the level at which you have to pay the full rate. WTC are regarded as income.

 

This got me thinking .

 

If you ask why are banks taking your kids food and shoes money ,in exhange for a piece of paper telling you they have done this,( This is a Bank Charge) they reply it is impossible for their highly complex financial operation to dinstinguish between your benefits and other income.

 

 

If you haven't sent the bank a letter demanding a right to first appropriation of any benefits, ( it is actually illegal for them to take your benefits to pay debt*,) then, any time they have made a charge they have still taken your benefits and you can easily prove what is monthy earned income and what is benefit. Ie if you pay in £1000 and get £100 WTC monthly then at least 10% of all charges and interest must be derived from those benefits.

 

Irrespective of whether they recgnise hardship and fully return the full amount of charges they have a legal duty to return at least 10% of those charges and interest charged on the overdraft as well as 8% intrest on the % of benefit incurred over the period of time they have been making charges . And if you consider the legislation this should be, no quibble, immediate, and a separate issue from general hardship reclaiming of charges and interests incurred.

 

Social Security Administration Act 1992 *

 

187 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.

 

 

 

What do you think? Is there a time period

 

 

Hardship

The FSA has set out official hardship guidelines to include the following:

 

 

  • Are items repeatedly being returned unpaid due to insufficient funds?
  • Are you defaulting on loan repayments or other financial commitments?
  • Has your regular income stopped eg have you lost your job?
  • Are you considering bankruptcy or getting an IVA?
  • Are you making regular requests to increase your borrowing or regularly rescheduling debts? eg are you often increases credit card limits in order to pay bills? Do you have a debt management plan in place as you can't afford repayments at the usual rates?
  • Are you taking cash out from a credit card that has a higher rate of interest?
  • Are you repeatedly going over your credit card limit or overdraft without a prior agreement in place with your bank or creditors?

 

The FSA has also said that: "where a complainant has incurred over £500 in unauthorised overdraft charges in the previous 12 months that is to be treated as indicative of financial difficulty.

Edited by roofovermyhead
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I have recently had a converstion with the Council Tax people to see if I was eligable for a reduction on Council tax. They told me I wasn't , because my Working Tax Credits made my income up to the level at which you have to pay the full rate.

 

This got me thinking .

 

If you ask why are banks taking your kids food and shoes money ,in exhange for a piece of paper telling you they have done this,( This is a Bank Charge) they reply it is impossible for their highly complex financial operation to dinstinguish between your benefits and other income.

 

 

If you haven't sent the bank a letter demanding a right to first appropriation of any benefits, ( it is actually illegal for them to take your benefits to pay debt,)

 

It is only ILLEGAL or maybe the term UNLAWFUL is actually the right terminology if they have taken you to court and your benefit has been assigned to the bank(that bit is unlawful under the Social Security Administration Act 1992).

then, any time they have made a charge they have still taken your benefits and you can easily prove what is monthy earned income and what is benefit. Ie if you pay in £1000 and get £100 WTC then at least 10% of all charges and interest must be derived from those benefits.

Bank charges from benefits are not unlawful btw.

Irrespective of whether they recgnise hardship and fully return the full amount of charges they have a legal duty to return at least 10% of those charges and interest incurred.

They don't but they should look at returning part of the money taken from benefits if the account is over the overdraft limit since the customer might use the principals in "treating customers fairly" to argue that the bank refused to allow them access to it. The bank can ask that some of the money is repaid to any amount outstanding/owing on the balance at the point the benefits go in. The FOS would see that as reasonable.

What do you think?

Non starter to a degree.

.

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

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