slightly academic play on 'right to offset'

[Guest HeftyHippo]

just been reading one of my credit card agreements, and it has the clause that the bank can

 

"use any credit balance on any other account you hold with us to reduce or repay any sums you fail to pay under this agreement..." they go on to say they will inform me asap if they do

 

now, they actually paid off this card by withdrawing from my current ac which was already over my OD limit, then closed the credit card and the current account and trasnferred both to a DCA (and they neither told me they had used my current ac to pay the CC, or told me they had closed either account!)

 

Now, this is a bit academic I suppose, but does the fact they withdrew on a debit balance rather tan credit actually affect things?

 

The CC was defaulted with a bad DN, and the overdraft CC was closed without any DN at all.

 

I feel they lost the balance of the CC other than the arrears because of the defectrive DN, and also maybe they lost the overdraft because they didn't issue a DN (but not sure), but wonder if the offset they applied changes things or gives me other arguments about them breaking the agreement maybe of the current account which probably has a similar term

[PGH7447]

How can they draw down on a minus balance, seems like they paid your CC debt with their own money, so write and tell em to take running jump

[Guest HeftyHippo]

How can they draw down on a minus balance, seems like they paid your CC debt with their own money, so write and tell em to take running jump

 

lmao

 

if i did that, it wouldn't make any difference as the repudiated the agreement anyway. If I could make a case that they somehow broke their rights to have the overdraft paid because of their withdrawal, but in making the offset they paid off the card arrears, then they wouldn't get the card arrears due under their repudiation and wouldnt get the overdraft back either.

 

Seems fuunny they complained so much when i was £50 over my overdraft limit, but then added on two grand from my CC and didnt say anything about it, or even tell me they had closed both accounts - I found out 3 months later when I CCAed them

[cerberusalert]

Don't you find it strange that they paid an a/c covered by CCA 1974 by one that wasn't then proceeded to pursue for monies owed?

[Guest HeftyHippo]

Don't you find it strange that they paid an a/c covered by CCA 1974 by one that wasn't then proceeded to pursue for monies owed?

well no, I never find it strange that they break yet another law/rule/guideline/element of fair business practice. I quite expect it from all of them.

 

In this case though, overdrafts are covered by the CCA, and as I was already in negative balance, they can't say the offset was applied against the current account, the money came straight from the overdraft.

 

I do understand what you say though, but when they made the transfer, they closed both accounts and transferred the money to a DCA so I'm not sure if it was just a genuine attempt at housekeeping by incompetent staff or that they were deliberately being underhand. Theyre always underhand, its just a case of whether its deliberate or not

[harrassed senior]

This sounds awful, and I bet if you were well off and could afford to take Legal Advice, you would find out just how underhand they have been. Have you tried a formal complaint to the FOS?

[Jasper1965]

Now, this is a bit academic I suppose, but does the fact they withdrew on a debit balance rather tan credit actually affect things?

 

 

IMO since the T&C's permitted them to withdraw on a credit balance and they actually withdrew on a debit balance, they are quite clearly as I suspect you've already concluded in breach of their own T&C's.

 

As it has been transferred to a DCA then I guess technically you can assert your lawful right to setoff and reclaim the current account balance (as an equity) under any assignment made under LOP 1925 if such assignment exists.

[Guest HeftyHippo]

This sounds awful, and I bet if you were well off and could afford to take Legal Advice, you would find out just how underhand they have been. Have you tried a formal complaint to the FOS?

 

no because I'm not sure what to complain about. In what way have I lost out? what rights have been infringed?

 

I just remmebred, they ddint ransferred to a DCA, it was to a 'debt account'. They still own it so I think its their process of writing it off and engaging DCAs to chase.

 

They could have trasnferred the CC balance to the debt account, and the same with the current ac. They didnt. They trasnferred the CC to the Current ac, then transferred that to the debt ac. Same result, but they broke their own TnCs.

 

As i said, they repudiated the CC so I wonder if there was some way they also lost the rights to the arrears on the CC and to the overdraft. That would make me smile

[rameses_qc]

In my opinion, I would complain loudly and long to the bank. You would have to go through their complaints procedures before going to the FSO anyway. They appear to have breached their own terms and conditions by taking you over your authorised overdraft (which they shouldn't charge you for, as it's their fault) and additionally taking the money from a negative balance (which their terms and conditions don't seem to allow for) There's 2 breaches there.

[Guest HeftyHippo]

In my opinion, I would complain loudly and long to the bank. You would have to go through their complaints procedures before going to the FSO anyway. They appear to have breached their own terms and conditions by taking you over your authorised overdraft (which they shouldn't charge you for, as it's their fault) and additionally taking the money from a negative balance (which their terms and conditions don't seem to allow for) There's 2 breaches there.

 

The most I would get via teh FSO is an apology from the bank. They transferred the CC balance to the overdraft (which I had already exceeded) and then closed both those accounts, moving the balance to a debt account (as part of their writing off process) for chasing by a DCA. It all happened the same day.

 

Yes they broke their TnC, but did they lose any rights in doing so, and did I suffer any prejudeice as a result?

[rameses_qc]

Well, you suffered a breach of contract; twice. they used a negative balance - which their terms don't allow them to do - They caused an unauthorised overdraft, which their terms don't allow. You incurred losses? (i.e. charges) If you did, you can recover those from the bankPS They can't put charges on an overdraft that was caused by their charges, if you get what I mean.All that would happen is, they would reinstate the credit card debt which would probably be at a higher rate of interest than the overdraft. They may think that they were doing you a favour. I would definitely complain to the bankThey didn't lose any rights really, they can still ask for the money to be repaid, but they will have to show a Judge that they acted fairly in what they did

[Guest HeftyHippo]

no charges were applied, they closed all both accounts teh same day they didthe transfers

 

I already had an overdraft and was already over the limit for it.

[rameses_qc]

OK then, they increased an unauthorised overdraft, which they really shouldn't doAs I said, complain to the bank.They still retain the right to collect the "debt"BUTIf they go to CCJ stage, they will have to show they acted fairlyI think they can show this, as they paid off a debt with a higher rate of interest, which left a debt with a lower rateThey could probably argue that this was in your best interestsAs to letting you know they were closing the account, they should have given you the notice stated in their T and C, otherwise you can claim any costs that you incur fior sorting another account (in theory)