overdraft stopped, taken working tax credit

[john]

Hi I am self employed, and frequently use my overdraft. I had a tax credit payment paid in, and paid 200 cash in to cover a direct debit, and they have taken it from the overdraft so my available credit is zero. I am at my wits end, don't know what to do.

[john]

OK, been reading up on this. Basically I'm a self employed driver and I have had an account with Halifax for years. I had a £2000 overdraft which I reduced to £1990 when they restructured their charges late last year. I am never in the black but usually keep below my OD limit to varying degrees.

 

My car broke down on 1st Feb and due to various cock ups in parts delivery by the Royal Mail, and other factors beyond my control I was without it for a whole week, therefor could not work. I Knew my car finance payment was due on 12th so went in branch yesterday to pay in to cover the payment. When I got home I tried to put some credit on my phone and it wouldnt accept my card. I went online and it was then that I noticed my OD limit was reduced to zero, and that a tax credit payment had been paid in and my available balance was zero.

 

I phoned immediately and was told that apparantly they did a review and there was something on my credit file. I Have applied for the 3 statutory files and the one I have so far has nothing adverse on it. I spent an hour and a half on the phone to them explaining that if they do this I will not be able to work but they said I can still run my account and pay off the OD. How can I run my account if they won"t pay any of my bills? How can I live when they are taking my tax credit?

 

I have been reading through threads on here, and wondered if this comes under BCOBS as on a thread I have read it says

 

"• unexplained peremptory withdrawal of overdraft facilities - once again, the length of time that the account or overdraft has been in place is highly relevant - especially in respect of small businesses"

(http://www.consumeractiongroup.co.uk/forum/content.php?827-Examples-of-unfair-treament)

 

I was wondering if I should ring and quote this to them, and if anyone could point me to the section of BCOBS that refers to this. Also can I quote 'appropriation' in regards to the tax benefits?

 

Thanks.

[john]

I have drafted the letter below and would be grateful if anyone more articulate than me could check it out. Any suggeastions for improvement gratefully recieved!!! Thank you.

 

I am writing to complain about your treatment of me as a long term customer in light of my recent financial difficulty, which was communicated to your customer services representative on 11th February 2013.

 

I am a self-employed driver and I have had an account with you for many years. I had a £2000 overdraft that I reduced to £1990 when you restructured your charges late last year.

 

My car broke down on 1st Feb and due to various errors in parts delivery by the Royal Mail, and other factors beyond my control I was without it for a whole week, therefore could not work, so did not earn anything. I Knew my car finance payment was due on 12th so went in branch yesterday to pay in £200 to cover the payment. When I got home I tried to put some credit on my phone and my card details were not accepted. I went online to check my account, and it was then that I noticed my OD limit was reduced to zero, and that a tax credit payment had been paid in and my available balance was zero.

 

I phoned immediately and was told that apparently you did a review on my account, and that you found something on my credit file. I have applied for the 3 usual statutory files, and the one I have so far has nothing adverse on it.

 

I spent an hour and a half on the phone to your CA explaining that I will not be able to work now, and therefore will earn nothing, but your CA said that I can still run my account and pay off the OD. How can I run my account if no bills are going to be paid? Also how am I expected to live when you are taking not only my earnings but also my tax credit payments?

 

My complaint is, therefore, that I have been treated unfairly under the Banking Conduct of Business regulations, which states that it is unreasonable for the bank to make unexplained peremptory withdrawal of overdraft facilities - the length of time that the account or overdraft has been in place being highly relevant - especially in respect of small businesses.

That I have not been treated fairly and I also assert that my tax credit payment should not have been withheld under the rules relating to ‘appropriation’, specifically:-

 

BCOBS 5.1.3A

To ensure compliance with its obligations under BCOBS 5.1.1 R and Principle 6, on any occasion where it proposes to exercise a right of set-off, a firm (other than a credit union) should, with respect to its dealings with consumers:

(ii) the consumer has received that money from a government department, local authority or NHS direct payment body for a specific purpose or is under a legal obligation to a third party to retain and deal with that money in a particular way.

 

BCOBS 5.1.3B (1) 2If it becomes apparent to a firm after it has exercised a right of set-off that it has set off or combined a debt due from, or a debit balance on an account held by, a consumer against or with:

(a) the consumer's subsistence balance; or

(b) money payable by the firm to the consumer, or standing to the credit of the consumerin an account held with the firm, that falls within BCOBS 5.1.3AG (2)(b)(i) or (ii);

the firm should refund to the consumer the sum debited from the account of the consumer in exercise of the right of set-off unless it is fair not to do so.

 

BCOBS 5.1.4 Dealings with customers in financial difficulty

Principle 6 requires a firm to pay due regard to the interests of its customers and to treat them fairly. In particular, a firm should deal fairly with a banking customer whom it has reason to believe is infinancial difficulty.

Edited February 12, 2013 by john

[AndyOrch]

Responding to your PM John,

 

I wil get back to you shortly.

 

Regards

 

Andy

[john]

Thank you very much Andy

[AndyOrch]

Hi John

 

Re your proposed letter

 

There is a statute that states your benefits cannot be taken for a debt, You can find this under The Social Security Administration Act 1992 under number 187.

 

Link :- http://www.legislation.gov.uk/ukpga/1992/5/section/187/enacted.

 

I would also advise you to ditch this crew now and open a basic current account with another bank not connected.

 

Regards

 

Andy

[john]

thanks Andy. I have opened another account today and cancelled all my SOs and DDs. I really could do with getting my tax credits back though.

[AndyOrch]

Appreciate that John ...but in the meantime they wont be getting their mites on any further monies. Dont forget to inform Tax Credits of your new account number.

[john]

Result - decided to phone first and quote a few legalities at them. Didn't need to they've agreed that if I go into branch tomorrow I can withdraw all my tax credits.

 

New account opened, as I said, all dds and sos cancelled. Changed bank details with tax credits and can start re-instating all my other payments.

 

Now will wait for Halifax to demand repayment of the overdraft!!!

 

Thanks again Andy

[maroondevo52]

Glad you got that sorted john, I was also with HBOS for years when I was self-employed, they were a total nightmare could'nt give a jot if you needed help or not, some years ago I claimed back a few grand in Bank Charges, they closed my account of 25 years !!!

[john]

To be honest its probably a good thing, kick up the bum so to speak. Just need to pay off the OD gradually now. Seems like all the banks are the same now, business first customers last!!!

[AndyOrch]

Isolation is the only course of action once they have you on the Overdraft roundabout.Create a paper trail John now of your offers /proposals to settle the O/D and their responses.Invite any payment plan to be confirmed in writing.

Collate any notices received of intended litigation and Demand termination Notices.

 

Maybe a good ideal also to do request a D.S.A.R on the account now to quantify all the charges and interest....they may well Litigate.

 

Regards

 

Andy

[john]

Strange, went into branch to get the tax credit payments, (took over an hour) and was told by one of the staff that halifax and Lloyds are splitting and the cooperative bank taking over some of their business????

[AndyOrch]

http://www.bbc.co.uk/news/business-18898125

 

You didnt open your new account with the COOP did you?

[Desperate Daniella]

I heard that the Co-op have bought a number of Lloyds branches, about 300 I think. I moved to the Co-op two years' ago after major issues with Barclays, and they have been absolutely terrific. The call centres are in the UK and everyone I have spoken to has been very pleasant. The only slight problem has been the lack of branches so if you want to ensure when a cheque goes in you have to drive to a Co-op branch. If you pay in at Britannia (who they are linked with) or a post office then it can take several days for a credit to appear on your account as they get posted to the processing centre, and not every day. In a recent survey in a women's magazine, the Co-op were not included due to their small number of branches but the article mentioned how much very positive feedback they had received about the Co-op.

[john]

No, Andy, went for Yorkshire Building Society, thank heavens!!! I think the inferation was that they were weeding out the accounts???