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Halifax Changes

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Halifax are to be taken over by Lloyds, and this created a question for me re: security.

Before anyone replies I should point out this is not about the most probable outcome, but the worst possible scenario. This is because in my experience "It can and does happen."

Banks are permitted to transfer money from one account to another belonging to the same person. This is IMO a security risk for the following reasons. First the links:

1) PayPal are part of Google are part of Ebay. PayPal can debit your linked bank account in the event of a dispute, and Google accounts have been known to be "hacked" on a large scale.

2) Halifax are now part of Lloyds who recently were on TV about transferring funds between accounts without the users permission.

Now consider this scenario:

User goes on holiday. A PayPal complaint goes in following a Ebay sale. Paypal contact the user who is unavailable. Paypal serve notice and debit the Halifax account while dispute is being resolved. Halifax account goes into debt and Halifax deduct funds from the Lloyds account to settle. (This action has been confirmed correct by a Halifax telephone representative.)

But the Lloyds account is a business account, and as a result the business balance isn't met at the end of the month and loan payment fails.

If the buyer has no real claim and should it go to court insurance will most likely not cover this, and as it's contract law this must be heard in a high court... Very expensive.

You should be able to see where this could go, and each stage is quite legal and permitted.

With small businesses a great deal of trust is placed in the reasonable behaviour of the banks, but lets not forget the banks are here to make profit, and in the event of any discrepancy most banks will have no quandary performing a risk assessment. Once the figures are seen the reason is of no concern. The company credit rating is adjusted.

I don't think it should be legally allowed to debit a healthy limited company bank account in order to cover a private debt, even though the Company director may be the same.

I've had 25 years of trouble free banking. Care has been taken to ensure in the event of fraud or theft damage is kept to a minimum however over the years seen lots of potential security problems. Recently the appalling attitude and actions of the Nat West which although not directly related still involve "fine print" have caused me to examine the above procedures in detail.

Do the public have ANY protection now? or do the terms and conditions you sign when opening an account make it cut and dry? ( I.E. It's your fault unless you can prove it wasn't)

Once again any reply on the lines of "Oh that couldn't happen." or "it's very unlikely" should be ignored unless actual figures can be verified.

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