Overdraft on an account where credit not available

[firstclassx]

Hi

 

Basically I was representing an employee who later resigned from her job before dismissal.

 

She has a Natwest Basic Account, which does not allow an overdraft.

 

Before she left the company, she had a £2k bridging loan from the employer. The terms were that if she left before it was repaid, it would be deducted from her final payment, else via county court.

 

Anyway, she was paid by the company around £2k salary on Friday, despite leaving on the Wednesday. The £2k was for the previous 4 week period. She should be paid next on 14/09/12 for the last couple of days, 12th August - 15th August which isn't much.

 

Basically, the company have now recalled the payment, which Natwest has allowed, which has resulted in a substantial negative (overdrawn) balance on the basic account as she spent most of /moved the wages on pay day.

 

SO:

1) Is the company allowed to recall a payment, claiming "made in error", when it is the case that it was not an error, just a company realising they won't get the money back from the true "final" payment as agreed in the bridging loan "agreement".

 

2) What can Natwest do in regards to an overdrawn account, which is not supposed to be able to be overdrawn? Surely they cannot add unauthorised overdraft charges/interest etc, because there is no agreement for an overdraft facility to be available.

 

Thanks

[citizenB]

http://www.consumeractiongroup.co.uk/forum/content.php?849-BCOBS-Round-up-Making-your-bank-treat-you-failry

 

BCOBs might have something that will help. In the link above - 3rd item down - "Textboook Reclaim of RBS charges in 2011" might give you some ideas.

 

I will try and find some more help for you.

[BRIGADIER2JCS]

I personally can't see anything that can be done, the money is owed and it was agreed that it would be taken from any terminal pay, it is I think between her the bank and the employer.

You are correct there is no contract for an overdraft, so it is unauthorised and attracts the relevant charges, the employer has recovered the loan as agreed.

The fact the account is overdrawn seems to be down to your colleague spending or as you say moving the money out of the account.

[johnvernon74]

Your empoyer did make the payment in error and recalled, and they can do this. You must have known they were going to ask for it back and they woulf not get it out of the 3 days owed. The bank have done what requested by BACS and they are not at fault. It leaves you in a negative position but very little you can do in my opinion.

[firstclassx]

Your empoyer did make the payment in error and recalled, and they can do this. You must have known they were going to ask for it back and they woulf not get it out of the 3 days owed. The bank have done what requested by BACS and they are not at fault. It leaves you in a negative position but very little you can do in my opinion.

 

Other than the fact it isn't my account, (it is someone I represented), thanks for the information. I am a (fairly new) union representative. Only really just completed the TUC & TSSA courses. Pensions/Finance isn't really covered in any usable detail.

 

I'm just wondering whether I might be able to get the employer on a technicality that this payment was not the "final" pay date, and as such they breached their own bridging loan agreement conditions by deducting the entire amount from the second to last pay packet, rather than the actual "final" pay date, which is in 4 weeks time, purely to prevent them having to take legal action.

[johnvernon74]

Other than the fact it isn't my account, (it is someone I represented), thanks for the information. I am a (fairly new) union representative. Only really just completed the TUC & TSSA courses. Pensions/Finance isn't really covered in any usable detail.

 

I'm just wondering whether I might be able to get the employer on a technicality that this payment was not the "final" pay date, and as such they breached their own bridging loan agreement conditions by deducting the entire amount from the second to last pay packet, rather than the actual "final" pay date, which is in 4 weeks time, purely to prevent them having to take legal action.

 

Not sure about a technical issue, however fact is clear the employee owed employer money back and she agreed to pay back from salary. If she had not agreed to pay from salary then you could argue an unauthorised deduction from salary. This does not appear to be the case?

[BRIGADIER2JCS]

There is no technical issue here the last FULL pay day was when the deduction was to be made so the company is right.