HSBC / DG Solicitors take Payment umlawfully?

[Psycho Bob :o)]

Hi,

My friend ( yes genuinely, not me ) is currently at odds with HSBC.

 

Over a year ago they sent a CCA to DG Solicitors which has yet to be met.

 

Today, my friend got a letter from HSBC stating that a payment of £200 is being taken from their bank account ( it quotes my friends HSBC account number then a DG Solicitor account number ) and says they are doing this as their right of SET OFF.

 

What's that all about ???

 

Surely they cannot do anything until the CCA request is met? and if in-house DG Solicitors where handling it, why would the payment advisory notice come on HSBC paper?

 

As it's a Bank Holiday, I've told my friend to transfer any funds from their account to a relatives elsewhere then promptly open a new account for themselves with a different bank to minimise any losses until this can be resolved.

 

I'm surprised my friend didn't get a new account last year as a matter of course, but they're not the full picnic when it comes to finances.

Edited May 3, 2010 by Psycho Bob :o)

[babybear39]

Unfortunately financial institutions do have certain rights to take funds from one account to service another.

[Guest HeftyHippo]

yes, set off is the right to use a credit balance in one account towards payment of another. any money in any account with a credit balance is a target

 

whether they can do so if they cannot produce a cca is a moot point as the right to set off is described in the agreement. however, far better to avoid the question of them being entitled to do it by emptying all other accounts. I was advised that banks have been known to take money from eg kids accounts where you are the trustee. ie strictly speaking not your money, but coming under your control. Can't vouch for that being true, but I was warned to close all accounts including savings

 

obviously, the only ones with access to the accounts are bank staff, and only they can physically move the money, hence it is normal bank stationery that notified you

Edited May 1, 2010 by HeftyHippo

[firstship]

Psyco........Hi..Right of Set Of is under the right set of circumstances allowed.....to avoid this happening again open a new bank account as soon as possible and ensure your money going to HSBC goes to the new Parachute Account........The CCA sent 1 year ago,can you prove they received this request along with your £1 postal order if you can did you send by recorded delivery account in dispute letter after 12 plus 2 days..............FS

[Psycho Bob :o)]

That seems rather unfair since they have yet to provide a CCA as requested over a year ago. I was of the understanding that no action could be taken or processing of data on the account in dispute until such time after they provide the information to meet s.78 requested from issuing a CCA request.

Hmmf,... so looks like my friend will be down £200 without recourse.

 

Edit.. I was replying same time as above posts where being sent...

 

I have advised my friend to open a new account elsewhere.

They have the proof of delivery/recorded delivery slip from when they sent the CCA request, and I believe they sent the 'account in dispute' letter after the time lapsed, but has had nothing since, which is why the letter they received today was such a shocker.

 

I'll go see my friend today for a chat and see if they can post here to give the full story.

Oh.. just remembered.. DG Solicitors/HSBC returned the £1 postal order about a week after it was sent, saying it was not required.

Edited May 3, 2010 by Psycho Bob :o)
removed identifying material

[babybear39]

Best bet now is to get an official complaint in with HSBC, exhaust their complaints procedure and then escalate to the FOS

[Guest HeftyHippo]

fact is, it is probably in the banks general terms & condition that they have set off, so even without the terms specific to the account, they probably have the right to do so. However, it is strange he hasn't followed up the CCA request after a year. something had to give, and his inaction has allowed the bank to take the initiative. get all money from that bank and elsewhere - under the mattress if he has to.

 

make complaints as advised and go to the useless FOS

[firstship]

Physco..........Regret virtually all Terms and Conditions have an OFF SET clause,I agree it is a very unfair situation............as HH as stated your inaction with HSBC re CCA has passed the whip hand back to the bank.You need to write to them concerning their lack of reply to a CCA that you can prove they received.Most important item is new bank account otherwise HSBC will hit you again.I am sure you are aware DG are the in house solicitors,the other in house horrors for HSBC are Metropolitan Collection Services,so in fact with each of them you are still dealing with HSBC,who are not the easiest bank to deal with.However there are lots of Caggers who will help and advise you as each situation occurs,all the very best.................FS

[Psycho Bob :o)]

Physco..........Regret virtually all Terms and Conditions have an OFF SET clause,I agree it is a very unfair situation............as HH as stated your inaction with HSBC re CCA has passed the whip hand back to the bank.You need to write to them concerning their lack of reply to a CCA that you can prove they received.Most important item is new bank account otherwise HSBC will hit you again.I am sure you are aware DG are the in house solicitors,the other in house horrors for HSBC are Metropolitan Collection Services,so in fact with each of them you are still dealing with HSBC,who are not the easiest bank to deal with.However there are lots of Caggers who will help and advise you as each situation occurs,all the very best.................FS

 

Heh Heh... sorry to be pedantic firstship, but I will not be doing ANY of the above, as I clearly stated, it is NOT my alleged debt, but my friends.

I'm sure my FRIEND will take the required steps though.

 

Really, considering that details are important, you really ought to read posts carefully before composing any reply.

Your reply was in good faith though, and I take it as such.

 

I am frog marching my friend down to the bank tomorrow morning to make sure the things that can be done, are done, and I will point my friend towards the letters template section available on this site.

[harrassed senior]

As a matter of interest does your friend have children, does (s)he get any benefits paid into that account?.

 

If so, and you are too late to take the money out, ie they grabbed it first thing tomorrow morning, there is a Right of Appropriation letter which could be used. I will find it and post up if you think it may help.

[Hardupnotfedup]

Heh Heh... sorry to be pedantic firstship, but I will not be doing ANY of the above, as I clearly stated, it is NOT my alleged debt, but my friends.

I'm sure my FRIEND will take the required steps though.

 

Really, considering that details are important, you really ought to read posts carefully before composing any reply.

Your reply was in good faith though, and I take it as such.

 

I am frog marching my friend down to the bank tomorrow morning to make sure the things that can be done, are done, and I will point my friend towards the letters template section available on this site.

 

I don't want to appear pedantic but all you had to do was transfer the advice mistakenly given to you to your friend, the details are the same whether you or your friend, someone is taking time to help you and you reply like that.

I suggest that as you do not know what you are doing and you are rude and obnoxious that you advise your friend to get someone more competent to help them.

I do not want to start anything unpleasant here and will not be looking at this thread any more but there was just no need for them comments

[harrassed senior]

Banks are not allowed to use Housing Benefit or any other income related benefits to repay an overdraft as the law provides that a customer needs a minimum amount of money to live on.

This is called First Right of Appropriation

 

Even if an account is overdrawn, a customer can choose how any further money paid into the account is used (for example to pay rent) using this ‘first right of appropriation’. It is necessary however for the customer to contact their bank with new instructions, usually, each time they make a deposit.

Following further queries with Citizen’s Advice on the final sentence 'new instruction each time you made a deposit' they provided more detailed guidance: In the written instructions the customer gives the bank, the customer should ensure that s/he makes it clear if s/he wishes any regular payments or future deposits to the account to be used to pay for specific items. If the client does not make this clear, s/he will have to give the bank new instructions each time a deposit is made.

This "Right of Appropriation" allows a customer to assign any funds entering their account to specific events and needs, not just benefits.

This is something all the banks should be aware of, but are loathe to publicise. Some banks however do not understand this process since it is not very often used.

Further information is available at the following website http://www.adviceguide.org.uk/c_bank..._societies.pdf

Whilst a customer can try this, there are 2 possible problems;

1) Ideally, they should give the bank 7 days notice before the first Housing Benefit payment is due to be credited to their account. Otherwise the bank could disregard the request. 2) They may just disregard it anyway and swallow up the money. The customer would then have to complain and involve the banking Ombudsman etc and, eventually, get it resolved. This could take a few weeks and would not solve the immediate problem.

 

The Social Security Administration Act 1992 provides certain benefits such as Housing Benefit to be ‘inalienable’.

The legislation that can be quoted in any approach to or complaint to a bank should include section 187- "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 the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors"

Information on the following website can help a customer claim back any resulting bank charges.

http://www.reclaimunfaircharges.com It is a free site – which also contains downloadable letters.

Please find below example letters – Right of Appropriation and Formal Complaint under the Consumer Credit Act 2006

Sample letter to bank

[Add Name and Address of Bank]

RIGHT OF APPROPRIATION

Dear Sir/Madam,

ACCOUNT NUMBER: xxxxxxxxx

I am writing to inform you that I am due to have Housing Benefit payments of £xxx paid into my account on xx/xx/xx, and I wish to use my first right of appropriation for this money, for the following purposes; Rent £xx

I have set up a standing order/direct debit/will withdraw the money for the above use, and I would be grateful if you would ensure that any other payments out of my account do not interfere with this withdrawal.

[Add details of the future regular payments if they will be regular payments of Housing Benefit.] Yours faithfully,

[signature]

[Enter your Address]

Sample complaint letter to bank

[Add Name and Address of Bank]

Dear Sir / madam,

RE: FORMAL COMPLAINT UNDER THE CONSUMER CREDIT ACT 2006

On DATE, I personally delivered the attached letter exercising my common law first right of appropriation in respect of payments in order to maintain my basic living requirements.

Instead of accepting this appropriation, your staff refused to abide by my common law rights. The bank has instead appropriated my payments for the purpose of paying an overdraft largely consisting of collection charges. I am aware of the FSA waiver (in respect of the current OFT test case), which expressly requires the bank to consider hardship. I am also aware of the Banking Code, which requires you to behave sympathetically.

Please consider this letter a formal complaint under your complaints handling scheme set up under the consumer credit act 2006. I request acknowledgement of this letter in a reasonable timeframe, with a copy of your companies’ complaint procedure.

Yours Sincerely

[signature]

[Enter your Address]

 

Banks are not allowed to use Housing Benefit or any other income related benefits to repay an overdraft as the law provides that a customer needs a minimum amount of money to live on.

This is called First Right of Appropriation

 

Even if an account is overdrawn, a customer can choose how any further money paid into the account is used (for example to pay rent) using this ‘first right of appropriation’. It is necessary however for the customer to contact their bank with new instructions, usually, each time they make a deposit.

Following further queries with Citizen’s Advice on the final sentence 'new instruction each time you made a deposit' they provided more detailed guidance: In the written instructions the customer gives the bank, the customer should ensure that s/he makes it clear if s/he wishes any regular payments or future deposits to the account to be used to pay for specific items. If the client does not make this clear, s/he will have to give the bank new instructions each time a deposit is made.

This "Right of Appropriation" allows a customer to assign any funds entering their account to specific events and needs, not just benefits.

This is something all the banks should be aware of, but are loathe to publicise. Some banks however do not understand this process since it is not very often used.

Further information is available at the following website http://www.adviceguide.org.uk/c_bank..._societies.pdf

Whilst a customer can try this, there are 2 possible problems;

1) Ideally, they should give the bank 7 days notice before the first Housing Benefit payment is due to be credited to their account. Otherwise the bank could disregard the request. 2) They may just disregard it anyway and swallow up the money. The customer would then have to complain and involve the banking Ombudsman etc and, eventually, get it resolved. This could take a few weeks and would not solve the immediate problem.

 

The Social Security Administration Act 1992 provides certain benefits such as Housing Benefit to be ‘inalienable’.

The legislation that can be quoted in any approach to or complaint to a bank should include section 187- "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 the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors"

Information on the following website can help a customer claim back any resulting bank charges.

http://www.reclaimunfaircharges.com It is a free site – which also contains downloadable letters.

Please find below example letters – Right of Appropriation and Formal Complaint under the Consumer Credit Act 2006

Sample letter to bank

[Add Name and Address of Bank]

RIGHT OF APPROPRIATION

Dear Sir/Madam,

ACCOUNT NUMBER: xxxxxxxxx

I am writing to inform you that I am due to have Housing Benefit payments of £xxx paid into my account on xx/xx/xx, and I wish to use my first right of appropriation for this money, for the following purposes; Rent £xx

I have set up a standing order/direct debit/will withdraw the money for the above use, and I would be grateful if you would ensure that any other payments out of my account do not interfere with this withdrawal.

[Add details of the future regular payments if they will be regular payments of Housing Benefit.] Yours faithfully,

[signature]

[Enter your Address]

Sample complaint letter to bank

[Add Name and Address of Bank]

Dear Sir / madam,

RE: FORMAL COMPLAINT UNDER THE CONSUMER CREDIT ACT 2006

On DATE, I personally delivered the attached letter exercising my common law first right of appropriation in respect of payments in order to maintain my basic living requirements.

Instead of accepting this appropriation, your staff refused to abide by my common law rights. The bank has instead appropriated my payments for the purpose of paying an overdraft largely consisting of collection charges. I am aware of the FSA waiver (in respect of the current OFT test case), which expressly requires the bank to consider hardship. I am also aware of the Banking Code, which requires you to behave sympathetically.

Please consider this letter a formal complaint under your complaints handling scheme set up under the consumer credit act 2006. I request acknowledgement of this letter in a reasonable timeframe, with a copy of your companies’ complaint procedure.

Yours Sincerely

[signature]

[Enter your Address]

 

With thanks to the Money Saving Expert Site:

 

Banks are not allowed to use Housing Benefit or any other income related benefits to repay an overdraft as the law provides that a customer needs a minimum amount of money to live on.

This is called First Right of Appropriation

 

Even if an account is overdrawn, a customer can choose how any further money paid into the account is used (for example to pay rent) using this ‘first right of appropriation’. It is necessary however for the customer to contact their bank with new instructions, usually, each time they make a deposit.

Following further queries with Citizen’s Advice on the final sentence 'new instruction each time you made a deposit' they provided more detailed guidance: In the written instructions the customer gives the bank, the customer should ensure that s/he makes it clear if s/he wishes any regular payments or future deposits to the account to be used to pay for specific items. If the client does not make this clear, s/he will have to give the bank new instructions each time a deposit is made.

This "Right of Appropriation" allows a customer to assign any funds entering their account to specific events and needs, not just benefits.

This is something all the banks should be aware of, but are loathe to publicise. Some banks however do not understand this process since it is not very often used.

Further information is available at the following website http://www.adviceguide.org.uk/c_bank..._societies.pdf

Whilst a customer can try this, there are 2 possible problems;

1) Ideally, they should give the bank 7 days notice before the first Housing Benefit payment is due to be credited to their account. Otherwise the bank could disregard the request. 2) They may just disregard it anyway and swallow up the money. The customer would then have to complain and involve the banking Ombudsman etc and, eventually, get it resolved. This could take a few weeks and would not solve the immediate problem.

 

The Social Security Administration Act 1992 provides certain benefits such as Housing Benefit to be ‘inalienable’.

The legislation that can be quoted in any approach to or complaint to a bank should include section 187- "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 the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors"

Information on the following website can help a customer claim back any resulting bank charges.

http://www.reclaimunfaircharges.com It is a free site – which also contains downloadable letters.

Please find below example letters – Right of Appropriation and Formal Complaint under the Consumer Credit Act 2006

Sample letter to bank

[Add Name and Address of Bank]

RIGHT OF APPROPRIATION

Dear Sir/Madam,

ACCOUNT NUMBER: xxxxxxxxx

I am writing to inform you that I am due to have Housing Benefit payments of £xxx paid into my account on xx/xx/xx, and I wish to use my first right of appropriation for this money, for the following purposes; Rent £xx

I have set up a standing order/direct debit/will withdraw the money for the above use, and I would be grateful if you would ensure that any other payments out of my account do not interfere with this withdrawal.

[Add details of the future regular payments if they will be regular payments of Housing Benefit.] Yours faithfully,

[signature]

[Enter your Address]

Sample complaint letter to bank

[Add Name and Address of Bank]

Dear Sir / madam,

RE: FORMAL COMPLAINT UNDER THE CONSUMER CREDIT ACT 2006

On DATE, I personally delivered the attached letter exercising my common law first right of appropriation in respect of payments in order to maintain my basic living requirements.

Instead of accepting this appropriation, your staff refused to abide by my common law rights. The bank has instead appropriated my payments for the purpose of paying an overdraft largely consisting of collection charges. I am aware of the FSA waiver (in respect of the current OFT test case), which expressly requires the bank to consider hardship. I am also aware of the Banking Code, which requires you to behave sympathetically.

Please consider this letter a formal complaint under your complaints handling scheme set up under the consumer credit act 2006. I request acknowledgement of this letter in a reasonable timeframe, with a copy of your companies’ complaint procedure.

Yours Sincerely

[signature]

[Enter your Address]

[firstship]

Physco............I read your thread and i am aware its for your friend,i am giving you the advise to pass on,if you are not happy with this then i am sure somebody else MAY help you.....................FS

[Psycho Bob :o)]

Ouch! Sorry FS, I am happy with the advice, and HS thankyou also, I will show my friend this thread.

 

And to Hardupnotfedup .... ouch ouch ouch , that's a bit harsh, and the smileys are there for a reason. I just did'nt want everyone thinking it was me that had made such a basic error in not opening a new account elsewhere, so felt I should make it clear who the advice is for. I'm sorry you felt it was an aggressive posting but I did say to firstship "Your reply was in good faith though, and I take it as such.:grin:"

 

Sorry to anyone else who took offense, if I'd been angry with firstship, I'd have used an angry smiley, but I did not, I used the cheeky tongue-out smiley, and the VERY HAPPY smiley.

[brooooooooooce]

Ouch! Sorry FS, I am happy with the advice, and HS thankyou also, I will show my friend this thread.

 

And to Hardupnotfedup .... ouch ouch ouch , that's a bit harsh, and the smileys are there for a reason. I just did'nt want everyone thinking it was me that had made such a basic error in not opening a new account elsewhere, so felt I should make it clear who the advice is for. I'm sorry you felt it was an aggressive posting but I did say to firstship "Your reply was in good faith though, and I take it as such.:grin:"

 

Sorry to anyone else who took offense, if I'd been angry with firstship, I'd have used an angry smiley, but I did not, I used the cheeky tongue-out smiley, and the VERY HAPPY smiley.

 

Have a read of this:

 

banking: firms' right of 'set off'

[brooooooooooce]

Sorry, its a link to the FOS archive. Might be relevant if your friend has a joint bank account and the debt is in his/her sole name.