Right to Offset Rule - Lloyds credit card

[Honeypot]

Hi All

 

On my Lloyds credit card statements it says that they have the right to offset any available funds in bank/savings accounts to clear outstanding balance on a credit card.

 

If I had no available funds in my bank account can they go in and take the credit card payment and then make me overdrawn?

 

Thanks

 

Vicky

xxxx

[rhos123]

Hi All

 

On my Lloyds credit card statements it says that they have the right to offset any available funds in bank/savings accounts to clear outstanding balance on a credit card.yes thats correct

 

If I had no available funds in my bank account can they go in and take the credit card payment and then make me overdrawn? yes they can:mad:

 

Thanks

 

Vicky

xxxx

 

hi, this did indeed happen to me, [edit], i am in the process of changing banks.

Edited March 22, 2010 by saintly_1
potentially libellous remark removed

[debt4get]

make sure your account is not with lloyds..they can only touch the account you have with them..they can and will go into your account even if it leaves you overdrawn

[Honeypot]

So they will make me overdrawn even if I don't have an overdraft facility?

How can they take it out of my account if it's not there to have?

That would then cost me £35 for being overdrawn.

[dx100uk]

dont think they can cause more indebtedness by 'forcing' an overdraft situation

 

dx

[oilyrag]

Hi Honeypot,

 

All banks will try to do the same. We have an account stripped to its OD limit by Barclays. However we did a song and dance at a very busy time in the local branch and our money was returned toute suite when we started spouting the rules in public. Basically they cannot take money legally to leave you further in debt than you first started. The OFT takes a very dim view of such a state of affairs. One of the few things they do not like, but all banks will try it on. To do as some have said here is an infringement of the guidelines laid down by the OFT with regards to debt collection and as such total compliance with these guidelines is a condition of said bank holding a credit licence. This licence can be restricted or suspended if the OFT decide to do so based on the level of complaints. So the moment you have a justifiable complaint, then complain loudly.

 

We have an open criminal allegation on the table based this very unlawful activity at the moment.

 

regards

oilyrag.

[debt4get]

as rhos123 says it happened to him...all i can say is make sure you have another account in a different bank that your money can go into..better safe than sorry....

[oilyrag]

Totally agree D4T. Always have a "parachute account" somehwhere else other than where your dispute resides. However a small point I forgot, on our Lloyds terms & conditions about the current account it does say about credit cards and the right to set-off. It does say clearly that they are only allowed (please note the wording) to take money from the account if it is in credit not if the account is OD. Plus you can always lodge a letter of appropriation with your bank to ensure priority bills are paid first. The Card co. is not classified as a priority bill.

 

regards

oilyrag.

[Honeypot]

Thanks guys

 

so oilyrag if my credit card bill is £100 and I only have £50 in my bank then they can only take £50 out not £100 and make me £50 overdrawn?

[Hardupnotfedup]

they can omly take the amount that is in default if they took all of it then effectively they are demanding payment s before they are due surely

[dx100uk]

Thanks guys

 

so oilyrag if my credit card bill is £100 and I only have £50 in my bank then they can only take £50 out not £100 and make me £50 overdrawn?

 

correct

 

urm ah no hang on.

 

they can only take what is needed to put you at your CC credit limit - not the whole bill [if that is more]

 

and that must not make you overdrawn from the source of that funding.

 

 

 

dx

[oilyrag]

Fundamentally correct dx100uk. I have just been told not only is it against OFT guidelines it is also illegal to take money from your account leaving you more indebted on that account than you were previously. It is immaterial what is owed on the card in payment arrears if it is excess of the amount of credit you have in the account they are about to raid.

 

This protrection is in place as a matter of principle in law. Just think about how UN principled the banks are. If this was allowed to go on unchecked and uncontrolled then the banks would just take money from whereever to ensure that you are indebted to them on the account that has the largest amount of interest and charges repayable to them regardless of any other consideration and keep doing this iteration after iteration. As weak as the OFT are in protecting our interests, this they recognise as a [problem] and are generally along with trading standards very unhappy if a bank exceeds their rights on this "right to set-off". Most we have told on here that we got our money back were surprised but we did and raised Cain in doing so. As I say you can, certainly if you are on a restricted income eg benefits lodge a "letter of appropriation" with your bank to ensure your essential bills are paid before any "raid" takes place. And the CC co are way down the list whatever they or their cohorts try to tell you.

 

regards

oilyrag.

[SupermanX]

Hi

 

HSBC recently zeroed out my current account to pay the outstanding balance I have on a credit card account eventhough they have confirmed that they cannot find a CCA!

 

Also, at the time i opened the current account (1996), the T&Cs have no clause in relation to setting off. However, if you look at their present T&Cs they have inserted that clause.

 

I wonder whether i can challenge HSBC to get my funds back?

 

Super