HSBC Won't let you have Your money on demand.

[Tryst]

Well, I spoke to CAB and their legal counsellor said that many banks acted illegally by placing overdraft charges on accounts that were only used for benefits. Even my local Natwest admitted that they knew about this law and would only charge non-benefit accounts.

 

Incidentally, Santander have now refunded all the money they took in charges but it has taken over a year for them to admit they were wrong. My account with Santander has now gone from over £500 overdrawn due to charges on charges on charges to £160 in credit which makes me think someone with influence rattled their cage a bit and threatened them with legal action when the same was done to them. The fact that I was using a pre-authorised card at the time meant that their system should have been updated immediately and it should never have been allowed to happen to begin with. As a computer engineer and programmer by trade, I know that all card transactions could easily be done almost instantly, but why do that when you can trick people into going overdrawn by giving the illusion that there is more in the account than there actually is by leaving it days before you debit the account?

 

Same goes with cheques, a couple of clicks on a computer can reveal if there is enough in the source account to pay it. Why then does it take up to 7 days to process the cheque? Don't try to tell me that banks computers aren't all linked together, if that were the case, you wouldn't be able to use a Natwest ATM to get the exact balance and take money from your Lloyds account.

[SabreSheep]

http://www.consumerwiki.co.uk/index.php/Benefits_and_the_Social_Security_Administration_Act

 

This clears up the mis interpretation that is very common.

 

Do not get me wrong. I hate Bank charges and I hate people on benefits being ripped off. I just want to make sure that any advice given is as true as we can and to avoid people falling into the trap.

 

 

Please note the governments response to a petition request. The link that site refers to sadly no longer works .

 

The Government’s response 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.

 

 

Long story short from what I can see is "Your benefit cannot be paid to a third party to settle a debt but once it is paid into your account its free game"

 

Hence you would need to use BCOBS to force the bank to play fair, to give you your money and stop any charges being added to the balance.

[SabreSheep]

The pre authorised card is interesting. In which case you should not be allowed to go overdrawn in the first place and therefore no charges should be levelled.

 

Thats why if the banks are swallowing your charges the DWP can refer you to a post office or basic account to be set up to have your benefits paid into.

[SabreSheep]

Also im guessing they interpreted your legal action as one being under BCOBs which is why they would have backed down

[flynnsmum123]

"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."

 

That is the responce you will get from a bank if you demand charges back on the basis of that act. AT BEST you can expect the bank to give you the money back there and then however you account will still be credited with that money taking you further into debt.

 

HENCE

 

The advice is to use BCOBs to challange the bank instead highlighting unfair treatment whilst under financial hardship. THIS can get them to STOP the charges being imposed in the FIRST PLACE and preventing the debt from getting WORSE

 

PLUS

 

If you challenge the bank on BCOBs and they fail to treat you fairly you have an easy route to reclaim through the small claims court.

 

this is 100% correct,ive got a case with the ombudsman regarding this,just waiting for them to get back to me this week with their decision and its pretty much what the person dealing with my case said.

 

i too at first though i could have used the Social Security Administration Act 1992 Section 187 but once i read up on it a bit more and spoke to the ombudsman i stood corrected

[Conniff]

Keep in mind though the banks won't let you go overdrawn again so will decline any payment that will take you over, even if it's only by a few pence.

[SabreSheep]

Yup

 

Best advice I can give is if your bank is being a Pain in the butside, ask the DWP to refer you to open a post office account for your benefits.

 

Just for reference I found the link to the petition mentioned in the link above

 

http://webarchive.nationalarchives.gov.uk/+/http:/www.number10.gov.uk/Page16882.

 

As for BCOBs you can still reclaim charges if you can prove financial hardship. I believe that there are FCA/OFT guidelines somewhere that point out circumstances that the bank should have been able to identify without you telling them that you were in financial hardship. One of them I *think* was if you had £500 in bank charges in any one 12 month period.

[Klandestine]

Wrong!

 

http://averypublicsociologist.blogspot.co.uk/2013/03/claim-benefits-then-bank-charges-are.html

 

I was given a sheet of paper from the DWP that showed this part of the legislation when I told them that Santander were putting £35 charges on my benefits account.

They would not update their computer so the ATM showed that I had more in the account than I actually did. When I used my "pre-authorised" Maestro card to pay for something, it then went through but then I was charged £5 for an "unauthorised overdraft" and £30 for the debit card transaction that took me overdrawn. When I explained this to the DWP, they showed me the sheet of paper that detailed the law regarding charges on benefits accounts.

 

Social Security Administration Act 1992-Section 187

 

This sounds like a money management issue for than anything.

 

They would not update their computer so the ATM showed that I had more in the account than I actually did.

 

This probably isn't the case. It's more likely due to the fact that card transactions don't debit your account (i.e. affect your account balance) immediately. This only happens when the different organisations involved settle up.

In the meantime the amount is USUALLY reserved (affecting your available balance). But this is up to the retailer and they won't always do it for smaller transactions.

 

Ultimately you are responsible for the spending on your card and you do need to keep track of that.

 

I know some people who when money is tight keep a written log of their card purchases so that they know for definite how much money they have.

 

What do you mean by "pre-authorised" in reference to your Maestro card by the way?