Is the bank taking your Benefits ?

[InformedSearcher]

Banks are exceptionally swift at advising you about debt counselling! They have then fulfilled their argument that they helped. Banks are relectant to admit something or act on it when then know if it may tip the scales against them.

 

Let's give you a typical example of some debt counselling advice. You have say 3 credit cards. One requires you a minimum payment of £10 a month and the others £20 and £30 each. Your bank will have gleaned this data from your outgoings. It happens in this example that the £30 a month happens to be to this bank and the others are not theirs. In this example you are paying your bank only £20 of the £30 and the other two their correct amounts of £20 each. Out of the three it's only the banks card you are having problems with and the worst would be a Default Notice eventually from them. Now the automatic feature of debt counselling is that everything has to be pro-rata. You have a maximum of £50 to dspend for the three cards in total. So the debt counsellor recommends you the system whereby it's equally shared. This will mean that you'll fall behind with all three and eventually you'll have a Default Notice from all three plus the phone calls, letters and additional worry. If you make the probably 'right' decision as you did initially the debt counselling service will consider you unfair in the allocation of fund, you bank will still go forward and the other two will join in.

 

With regards to benefits they DO know! However remember they charge you fast and recourse is so slow. The bank does not discuss or negotiate anything and it is to you to force them to do anything. To the average person in this situation they will 'trust' the bank and not question them. Many people are embarassed about benefits, dislike seeing others watch them argue and the banks know this only too well.

 

Michael

[AA99]

With regards to benefits they DO know! However remember they charge you fast and recourse is so slow. The bank does not discuss or negotiate anything and it is to you to force them to do anything. To the average person in this situation they will 'trust' the bank and not question them. Many people are embarassed about benefits, dislike seeing others watch them argue and the banks know this only too well.

 

Michael

 

But us CAGGERS are not just average persons

[The GodMother]

yep ur right there AA

[InformedSearcher]

LOL Everyone is treated the same - or that's what banks they say they do! Anyhow all they do is tap in details and wait for the 'yes/no' responce from their system.

 

Michael

[babybear39]

'Computer says no'.

[InformedSearcher]

'Computer says no'.

 

I know! I think that's the whole problem - they probably have a software error on their systems, (I dread to think what their 'help' says regarding their screen view.)

 

Michael

[noright]

Firstly i would like to thank MARTIN3030 for the kind help he is offering.

I'm currently not on the doll but i have been, and i think their are people out there in this world who would be willing to steal property from a store for example, who could not bring themselves to do something like take money from people on the doll. How low can you get.

 

You'll always get some idiot defending the banks, i've heard it all. It's your own fault, it's in the small print, you should of known these charges this these charges that... What a load of garbage, any way of taking money from people for something they don't agree to is wrong. To which the **** will say. Well actually if you check the small print you did agree to it. Not only is this a sharp vicious tone wrapped up in politeness. But it's just plain wrong, most people don't want to read the small print, banks realise this and use it as a way to extort money. It's not like everyone is trying to do good, it's just a way of taking advantage of people less mentally savvy than themselves. To which they will reply it's a business not a charity.

 

Bank robbers could argue with the same points that what they do is a business, they are not a charity, ect ect.

All the arguments are from people with a half decent iq, which doesn't stretch far enough for them to be able to see the full picture. Or they do see the full picture and think it's ok, because they fit in with the persona of a person that is the banker taking money from people.

It's this kind of mentality that will see us into a new world order.

 

MARTIN, and everyone else i admire your patience.

The fact is, the last thing someone on the Benefits needs is to be dealing with more crap that they can do with out, the benefits system is a joke to start with. Most people do jobs that bring no moral value to the world so they can get paid to pay for the none purpose lives made up of things that don't matter, then to add to their babyness they complain that their hard cough fraud earned money is going to people who in their skewed opinion can't be bothered to work.

 

I believe in living for scientific advancement, education, being kind to each other, having real fun, doing good meaningful things for the future of everyone and not just ourselves. Yet because of the society i live in and the limited options that lie ahead for me, and having to try to get along with people i can't stand. I put serious thought into suicide sometimes.

[noright]

A good enough amount of people live in a society which put another way can be seen as, playing a game to which you are just getting to grips with, against a bunch of people who have mastered that same game. Any wrong move you make along your journey of educating yourself will cost you.

But as it is written in the instructions of how to play the game, it clearly states if you make a wrong move you will be charged for your mistake.

 

It's like Kasparov setting up a bank and requiring everyone to be able to solve intermediate chess puzzle to draw out money, but if they get the puzzle wrong they will be charged. Soon enough the more mentally savvy folk would get to such a point that they can solve these intermediate level chess problems, but allot of people not being as sharp would struggle, and end up losing allot of money, but according to our modern day structures this makes it ok because it clearly states in the small print when you opened an account that this would be the case. Then all the intermediate chess players would come online hurling abuse at lesser players that it's there own fault.

Edited June 2, 2010 by noright

[InformedSearcher]

Personally I was brought up many years ago in a society where the only debts were the 'tally man', 'The man from the Pru' and my parents who had a £500 mortgage. The average person had no cheque book but a visit to a wooden panneled bank counter with a pass book. Heck the average person had no phone or car and kids played on the streets!

 

These days this seems so amazing but it worked back then. Banks decided 'hey, we can make oodles of cash from these laypeople, they have respect for us and believe us to be honest and trustworthy'. What do we have now I ask? Well little respect for banks anymore who pressure you and omit to tell you what happens when you no longer have the funds to pay. We have DCA's who live on the edge of the law, often wavering into the stinging nettles. BUT we do have people who are now more aware and able to challenge the same banks.

 

With the reflections of what I've said I'd love to know how many 'complaints' staff were at the banks in the 50's compared to 2010?

 

Michael

[Scrapper]

It wasn't that long ago you could walk into your bank and actually sit down with a BANK MANAGER who you were on first name terms with and have a coffee.

 

If you had an issue they would listen and do their upmost to help you.

 

Nowadays I couldn't even tell who my Bank Manager is or was I've had so many different account managers.

 

If you try and call them they are never available or you get routed to a call centre in India.

 

Todays banking is up there with legalised loan sharking in my book.

 

Take you're money no matter what and if you can't pay slap a default on you and pass it on and move on to the next person. If they could get away with it I'm sure they'd send the boys round to rough you up.

 

It's all about the bottom line and to hell with the outcome and who's live we destroy along the way.

 

The government and all the relevant bodies that have been setup to protect you are about as much use a wet paper bag and just pay you lip service most of the time. Do you know why? Cause they are all in each others pockets.

 

I think we should all go back to keeping our money under the bed and let them all rot in hell.

 

Well thats my 2 pennys worth for now

 

Thanks

Scrapper Coco

[Pen]

LTSB will only let you apply the right of appropriation on 2 occashions after that they will close your account ! but with them as a bank it's a good thing they close it! They are the worst bank ever to deal with.

[The GodMother]

Pen. I have been told and have in writing that you are only allowed to use it at THERE discression.

[deathbycrayons]

Does a Right of Appropriation still hold weight since the supreme court decided in the bank's favour?

[Pen]

Hi Godmother. I used it once with LTSB afterwards they wrote to me stating that they would only honor it on 2 occashions after that they would close my account down. by that time i had moved to a different bank so did not test them on it. I'm not sure though if they could have closed the account just because of using the right of appropriation card there has to be discrimination there somewhere??? My account is with the ombudsman next time i speak with him i will ask him about it . it would be interesting to know

[Dylanspike]

I am unemployed and receiving tax credits for my family. i have bank charges from Natwest but i no longer use the account and they have closed it anyway. about a month ago a pension i was paying into sent out a lumpsum payment because i am no longer working. They paid it to my natwest account but i am unable to get this money as natwest told me i have to pay them my charges or make an arrangement with AIC then they will look at releasing my money to me! i am not sure what to do as i called AIC to make an arrangement but she wanted to know my incoming and outgoings but i dont know if i have to include my husbands details as well as it is only in my name? so she told me to go away and call back when i have this info. i would be grateful for any help. thanks

[JGJ]

Dylanspike,

 

An all to common tale re the conduct of the banks/debt collectors which is absolutely disgraceful. My post will bump you along a bit and someone with

 

more experience/expertise WILL be along to assist you. If all else fails click on the triangle to report your post. Best of luck.

 

 

"EXEMPLO DUCEMUS"

[Desperate Daniella]

Hi Dylanspike,

 

It seems as though even though your account had been closed NatWest obviously kept it open for incoming payments!!

 

Are the charges just part of an overall amount you owed to NatWest, who then sold it on to AIC?

 

If you need the pension money to pay priority debts these must come first and the Financial Ombudsman should be able to help here.

 

The debts are not your husband's so you do not need to give AIC any details about his income, but really I'd try to avoid giving them any info if you can avoid it. AIC are one of the worst.

 

Come back with some more info and I'll try to advise more.

 

DD

[WelshMam2009]

Having had Lloyds deduct monies from my account whilst overdrawn, I found this in the Banking Code for Subscribers (2008 at clause 14.3 which deals with financial difficulties) and which I believe is relevant and could be used in any complaint to FOS etc

 

The subscriber should take into account any other accounts that the customer may have with the subscriber if these

have a credit balance. In addition, if a customer has assets which could reasonably be expected to be sold to reduce

outstanding debts, the subscriber may request that the customer, and if appropriate, their adviser, considers this option.

 

Thereafter, the subscriber should acknowledge that income should only be used to repay ‘non-priority’ debts once

provision has been made for any ‘priority’ debts. The subscriber should leave the customer with sufficient money for reasonable day-to-day expenses, taking into account individual circumstances. Subscribers will not subject customers to harassment or undue pressure when discussing their problems.

A debt is considered ‘priority’ where the customer’s failure to pay could lead directly to the loss of one or more of the following:

• the customer’s home (e.g. rent, mortgage, secured loans);

• their liberty (e.g. council tax, child support maintenance, income tax, court fines);

• their utility supplies (e.g. water, gas, electricity); or

• their essential goods or services (e.g. a cooker, a fridge, or the means to travel to work).

 

The full document can be found here if anyone wants a copy.

http://www.bba.org.uk/media/article/banking-code-guidance-for-subscribers-2008-pdf-format

[what_todo]

what about contract, eg mobiles

[teaboy2]

Hi guys am currently helping a friend who has had charges taken from his benefits by Natwest. I have written up a letter for him to send to them, though i will not post that on here to avoid giving natwest the heads up.

 

I have however, also wrote to the Prime Minister regarding the issue of banks acting in breach of section 187 of the social security act (or for those on tax credit, section 45 of the Tax Credits Act 2002 applies). In the letter i clearly question the legality of what the banks are doing and the definition of a charge vs the definition of an expense which is what gordon brown (in an official statement, link provided below in copy of the letter) referred to a bank charge being and as such misleadingly claimed the banks where entitled to take charges from benefits, in clear contradiction of a publicly available letter send from the then secretary of state in 2007 to the banking association clearly stating it was illagal for them to take money from benefits, which the banking association confirmed in their response (links to the letters HERE).

 

I also go on to give a detailed example of just how easy it is for someone receiving benefits and a monthly wage can fall victim to the banks explotation of the law and end up with spirallying debts within 3 weeks all as a result of a measly £5 overdrawn from a direct debit that went out a week ealier without their knowlegde and that the bank had honoured.

 

Below is a copy of the letter minus personal details that i sent to the PM

 

FAO The Prime Minister

10 Downing Street,

London,

SW1A 2AA

 

Date: 12/01/2011

 

Ref: Section 187 Social Security Administration Act 1992.

 

Dear Mr Prime Minister

 

I write to you in regards to Section 187 Social Security Administration Act 1992 and Banks applying charges to those on benefits in ignorance to this legalisation. Note this is nothing to do with the question as to whether bank charges are fair or unfair, but instead to do with the banks exploiting those on benefits where the above legalisation is in place to protect them from financial hardship for every agreement to assign or charge such benefits that are covered by the above legalisation, the Key word here being charge.

 

The legalisation states the following:

 

187 Certain benefit to be inalienable

 

(1)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 a beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors.

 

Now in Mr Gordon Browns official response (found here - http://webarchive.nationalarchives.gov.uk/+/http://www.number10.gov.uk/Page16882), It states the following:

 

“The purpose of the Social Security Administration Act 1992 Section 187 and section 45 of the Tax Credits Act 2002 is to prevent people’s benefit money being at risk by it being assigned over to a third party in settlement of a debt. It is not intended to prohibit the application of bank charges. Bank charges are in the nature of an expense, and are incurred by the holder of the account; tax credits and benefits are payable in order to help customers meet their expenses, and as such it is legitimate for banks to deduct charges from the balance of an account held in that bank, whether the money paid into the account comes from tax credits, benefits or other sources, such as earnings.”

 

I totally disagree with the above statement, as a bank charge is not an expense as it is a debt levied by the banks as a result of someone going overdrawn. An expense is not a charge, but the expenditure of money in order to obtain a product or service of equal value to the expense. When paying bank charges you get nothing back of any value, unless off cause you’re on benefits and struggling to pay the Bank charges and as a result incur extra charges. In Banking terms a Charge is a Penalty Charge for going overdrawn, just like a fine for antisocial behaviour is a penalty of breaking the law.

 

Off course there are those (no doubt including the Banks) that would argue that any form of financial spending is an expense. But then that would defeat the entire objective of the above legalisation and would make even Charges on debt (which let’s face it a charge is a debt until paid) nothing more than an expense also. In other words the legalisation would serve no purpose and would become ineffective.

 

However it clearly states “and on every agreement to assign or charge”, so every financial and non-financial agreement where an expense, penalty or charge is assigned or charged, that is in place at the time of receipt of such benefits are for the purpose of the act void. Now a Bank Account is based upon an agreement between the consumer and the Bank, where such charges are part of the terms to such agreements. So basically the Act is stipulating that should the consumer be on benefits covered by the act, then any terms of the agreement where charges are assigned to the agreement are void whilst the consumer is on such benefits. Therefore the agreement is not void in its entirety but only the terms that assign charges to the agreement, become void. Therefore regardless of whether a charge is an expense or not the legalisation clearly states to assign or charge such benefit is void, if part of an agreement. The Legalisation does not differentiate between charges, penalties or expense because they all apply, under the form of a charge or assignment of a charge, and therefore all such terms that assign or charge them are void, whilst the person is on benefits. The Fact the word inalienable is used is also key, as it clearly means the benefits in question cannot be repudiated or transferred to another (another being the Banks or other party to the agreement). This alone means the banks have no legal right to transfer such benefits protected by the Act to themselves and doing so puts them in breach of section 187 or the said act.

 

In other words, Gordon Browns official statement is wrong and misleading and needs to be readdressed, as it completely ignores the core wording of the section 187, which does not differentiate between expense, charges or penalties. It clearly states under subjection 1 “(1)Subject to the provisions of this Act, every assignment of or charge on” Therefore a charge is a charge not an expense. Calling it an expense is nothing more than an amateur’s mistake, that I would expect a non-legal professional to make. It clearly shows that he (Gordon Brown) or the person advising him, or advising the author of the official statement, clearly did not read section 187 fully or understood it fully, but more likely only looked at it briefly. As it clearly states:

 

“Subject to the provisions of this Act, every assignment of or charge on - benefit as defined in section 122 of the Contributions and Benefits Act; and on any income-related benefit; or Child Benefit. And every agreement to assign or charge such benefit shall be void; and, on the bankruptcy of a beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors.” And I understand that as it is, therefore no charges should be taken from money paid into a person back account that is part of benefits money, but only taken or assigned to money that is from non-benefit money (I.e. working income).

 

So is it ok for banks to take money from people benefits? No, it’s not as that’s unlawful according to the Act. Is it ok for the bank to take money from income that is not a benefit? Yes it is as the act only applies to benefits money.

 

For example:

 

Say I am a working single father/mother of 1 child that gets paid monthly and I started the week (second week of the month) with £5 in my bank, only for a direct debit of £10 to go out a week earlier due to the normal due date being a bank holiday, where I had not been informed of it going out earlier. Now I get a letter dated from the last day of the week before (Friday), stating that I’ll be charged £35 + £5 in charges until my account is in the clear. Now I normally get Child Benefits paid into the bank each Wednesday (just as an example), which I usually buy the weekly shopping with. That’s £5 multiplied by 3 days (Fri, Mon, Tuesday) equals £15 add that to the £35 and that’s £50. Now say I only get £50 in child benefits, Wednesday comes and the bank takes out the £50 again leaving me £5 overdrawn as the original £5 I had at the start of the week minus £10 direct debit equal -£5 in the red. So yet again I will get charged £35 + £5 a day until it is cleared and the next money I get is the next payment of child benefits of £50 on the following Wednesday which is 5 working days. So £5 multiplied by 5 (Wed, Thurs, Fri, Mon, Tues) equals £25 plus the £35 equal’s £60. So the third week (following week) they will take £50 child benefits yet again. Meaning no money for food for a second week, by this time my child is starting to suffer the effects of malnutrition. Off course after the second child benefit payment is taken by charges I will still be £15 pound in the red and as a result will face another £60 the next Wednesday. Fortunately I get my monthly pay 2 days after that, so I will still incur an extra charge of £35 plus 2 £5 daily charges to cover for Wed and Thurs of the fourth week, leaving me a total of £30 pounds outstanding after paying the third week’s charges (£60 again) and £45 of charges for the last 2 days that I am overdrawn. Fortunately family was able to lend me food to feed my child as the banks weren’t interested, they were only interested in exploiting me and my child of a total of between £200 - £245 just because I went overdrawn by £5.

 

Now that is a perfect example of what happens to people when banks take charges out of their benefits. Yet there is a simple solution to preventing such hardship from ever happening, and that is to enforce the law preventing banks taking money from benefits that people very much rely on just as in the example above. The simple solution is already law - Make such charges null and void when the only money in the account is benefit money. If a person received non benefit income into their account in the same week/month then the banks can take their charges. But also an additional law that bans the additional daily charges should be brought in along with a cap being put in place on the total of a single charge, to prevent banks from charging a huge amount to make up for the loss of the daily charges. A £35 charge for each over-withdrawal or bounced check or rejected direct debit is high enough. For those on benefits with no other income, all charges should be null and void completely, or a set percentage of what the total charges would have been made repayable when they find work, off course the repayments of such a set percentage should be made over a set period of time and agreed between the Consumer and the Bank. This would prevent unnecessary hardship as described above in the above example of how hard it is for people that become victims to the Banks exploiting section 187 of the social security administration act and an example of how easy it can spiral from a £5 debt to a debt over £200 (1 weeks average wage in my area, after tax is paid) within 2 weeks.

 

I know my way of explaining what I think in writing may be difficult to understand or read, and I apologise for that and the poor grammar. However the law is clear on charges assigned to benefits being void whilst on benefits. So I implore you not just as the Prime Minister, but as a Human being to put a stop to the suffering and hardship that people, are having to endure as a result of the banks greed and unlawful actions.

 

I look forward to receiving your response.

 

Yours Sincerely

 

xxxxxxxx

[Wingus]

First of all, i am no legal expert, but i know a bad thing when i see it. Surely the banks are not allowed to touch benefits because as it states on the benefit letters, the amount they award you is based on the income your allowed to have by law. If the law says your entitled to it, then the banks cannot reasonably touch it at source, i would have thought they wopuld have to ask you before taking any amount out from your account, and for what reason.

 

Secondly...there is an account, that was set up quite intentionally, by the government, to recieve benefits. It's from the post office, called Post Offie Account, and the whole objective of that account is to recieve any benefits, or other payments from the government, or other officials...like inland revenue etc. I would like to suggest and recommend that people open up an account there, since you cannot go overdrawn, cannot do standing orders or direct debits, it's just a simple account, and there is no way you can get any bank charges.

 

I already knew something like this would happen a long time ago, and have been almost harrassed by the banks to get my benefits paid to them, but i wont have any of it, because i knew they would interfear with it at some point. When the banks start getting desperate for me to transfer my benefits to them...i get suspicious.

 

I hope you all get your money back, or at least some of it....and perhaps refer to getting bank charges bank forum on this site as well.

[InformedSearcher]

Well regarding the 'Post Office' restricted account you mention. The problem with it is that it 'is' so restrictive. The DWP themselves dislike it because if I recall it costs them circa £1 per payment. The banks on the other hand charge circa 20p. The Post Office account mentioned does not have the basic extras even a banks cash account has. A banks cash account services whilst allowing payments, withdrawls, direct debits and standing orders allows no loans or anything to do with credit.

The accounts people have problems with regarding banks are standard accounts and better. Banks look as money paid as exactly that and not something more. Their automated systems merely pay out as requested unless the funds are not there then again, automatically make the penalty charges.

The common fault is that when someone tells them they are benefits, normally that person knows nothing about the law and using benefit money for debt. Once you make enough 'noise' banks tend to back off and reverse the monies. Unfortunately by doing that this often means the penaly fines clock in. I've always though it sad that someone with little or no funds are charged often more in fines that the original payment was for. This leads eventually to default notices and other concerns.

 

Michael

[babybear39]

Yep!!!

[Wingus]

That's exactly why i like the post office account, it has no features like a bank...including bank fees. For that 80p difference, compare that to the £20 or up to £40 bank charge...i know what i would pay. Of course the DWP dont like it, it means they have to pay, and ultimately the tax payer. Meanwhile..the banks, that still cannot define a reasonable excuse as to how they can charge bank fees, hide behind thier wealth and red tape.

 

There is no reason why you can't have a post office account and a bank account for normal day to day tansactions, makes sence to me, plus it's how i was able to be debt free, since i no longer pay bank charges, i can use that money to pay other things that need paying, like food and important bills.

[Be Unique]

I was due to have my JSA payed into my account this following saturday, checked my bank on the morning and nothing was in. however they claim to have payed me. so someone has taken them.. not sure if it was the bank or my PDL company.