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hi everyone,

i have just been adviced by a gentleman at natwest to reclaim my bank charges even though i know there all on hold till the test case is over so i have sent them a letter asking for them all back i also contacted the finacial obmundsman as most if not all my bank charges were taken from my tax credits which is a goverment payment and the obmunsman adviced me that banks cannot take charges from benefits eg jopbseekers, social security extra extra will this help in getting my charges bck in 1 week they took a total of over £200 in charges which wiped out my familys tax credits leaving us no money to live on we explained this to the bank and they basicly said tough..


basicly the question im asking is if the banks cannot take back money from benifits am i entitled to all my charges back without having to wait for the test case to finish????

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Basically yes, you shouldn't need to wait until the test case is over. The FSA have stated that the FOS will look into cases involving hardship as a result of bank charges. Clearly you fall into this category.


You need to stress to the bank and then if required to the FOS that this is benefits money and the taking of charges is causing you ongoing financial hardship.


I would advise that you send the bank a Right of Appropriation letter. An example is shown below:


Dear Sir/Madam,


Bank Charges and Benefits and the First Right of Appropriation




I am writing to you following several charges debited from my account totalling £xxxx on (date).


Bank charges are unlawful penalties for breach of contract. However, the bank or building society is only allowed to charge you what it costs to cover their administrative charges. If they charge you more than this, you may have a legal right to get back the difference.

Notably, and in my instance, if the income in an account comes from benefits, they are also contrary to the legislation relating to benefits. If the income is from incapacity benefit, job seekers allowance, etc , they are contrary to section 187 of the Social Security Administration Act 1992. The working of this Act comes under the Treasury and the Department of Work and Pensions, respectively and are quoted below for your immediate attention.


Social Security Administration Act 1992


Certain benefit to be inalienable **


187- 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 the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors


When you open an account with a bank or building society and use their services, you are entering into a contract. The law says that the bank or building society must carry out its business:-

• with reasonable care and skill.


If the service is unsatisfactory you may be entitled to compensation if the contract has been broken. I believe that there has been a breach of contract as I feel your organisation has failed to handle my affairs with reasonable care and skill.


This failure on your behalf has caused me a great deal of hardship. I am left with no means to pay the rent/bills due to the unauthorised amount now outstanding. The incoming amounts due to be deposited into my account next week will only clear the amount outstanding leaving little if any to pay the rent, for housekeeping or utility bills such as gas.

I ask for a little compassion and request that the benefit amounts totalling £xxxx, debited in order to pay for your default charges, be refunded by return.


I am also writing to inform you that I am due to have the following payments made into my account:-

  • Tax Credit payment of £xxx on xx/xx/xx
  • Child Benefit payment of £xxx on x/xx/xx
  • Incapacity Benefit payment of £xxx on x/xx/xx

Totalling £xxxx,


I wish to use my first right of appropriation for this money, for the following purposes;

Rent £xx

Utilities bills £xx

Housekeeping money £xx

I will withdraw the money on the day that it is deposited for the above use, and I would be grateful if you would ensure that any other payments out of my account do not interfere with this withdrawal.


Yours faithfully,






Please note opinions given by rory32 are offered informally as a lay-person in good faith based on personal experience. For legal advice, you must always consult a registered and insured lawyer.

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