Do you have money worries and a loan or credit card with your bank?

Unluckycharm · 2 June 2010 at 8:41PM

Whilst I have sympathy for those in financial difficulty, I find it a little unnerving to read how few people are taking responsibility for their own actions.

Why is it the bank's fault that they have taken money you have failed to pay them when it is due? The bank doesn't sit and watch your account every minute, it only comes to the bank's attention when your payment is overdue. Why wouldn't any sensible money lender seek to reduce the amount of its problem debts - often highlighted by a first missed payment? The bank doesn't know who is in early stages of financial difficulty or who just can't be bothered to make their agreed payments on time. Either way, it is an early warning that full repayment is looking less likely within the agreed timescales.

If you are having difficulty paying, contact the bank at the earliest opportunity. Once you have lowered your credit score with them by missing payments, there are fewer ways for the bank to assist.

Oh, and a little consideration for the bank staff that are trying to help gets you further. Accusing them of 'stealing your money', 'starving your children', 'not giving a toss' to quote but a few I have read in this thread is not the way to get the help you are asking for.

Mistakes happen and when they happen, they will be investigated and corrected. Unless you pick up the nearest computer and chuck it at the person helping you. I ran out of sympathy for this customer in financial difficulty.

And yes, I work in a bank.

lisa1708 · 2 June 2010 at 8:56PM

Hi I have entered into a dmp and have debts with hsbc were i hold a childs account for my son who is 2. My name is on the account Re My son does anyone know if hsbc can legally take money from this account

Cranberryberry · 2 June 2010 at 9:50PM

I have to say that given the months of trouble I've had trying to change the address on the Credit Card I hold with my mortgage provider I am shocked that they have the nous to link accounts in this way. Obviously they're "different companies" only when it suits them!

RuthnJasper · 2 June 2010 at 10:23PM

Doesn't this warrant an investigation by the OFT? Surely the banks have a vested interest in maximising profit - therefore they stand to benefit themselves if they take money from one's current account in order to satisfy a debt elsewhere in their organisation in the full knowledge that regular payments from said current account will default as a result, thereby incurring bank charges.

Seems a little bit like setting their customers up to fail in order to generate profit via missed payment charges.

Personally, I have separate accounts, if only because of the old 'not having all my eggs in one basket' thought.

To my mind, this is like the DVLA confiscating your car and then fining you later for not taxing the vehicle...

I have great sympathy for anyone in hardship due to this practice. Once again (whether rightly or not) the banks operating this - for want of a better word - scam, end up looking like they have all the morals and compassion of a toenail-clipping.

Sillychuckie · 2 June 2010 at 11:56PM

Can they take the money out of your ISAs to do this?
If so, do you then lose the tax free wrapper status on that for ever?

Same question for fixed rate bonds. Can they close early and not pay you the full term interest? ISA is main concern right now. I have 2 ISAs and a 0% credit card all with Abbey, so cash in the ISAs and debt on the card.

Tatt · 3 June 2010 at 6:05AM

My tenant, who'd been here nearly 10 years, was made redundant a year ago. He told me that his bank, Lloyds TSB, both refused to honour the PPI on his loan AND took his Housing Benefit for his loan.
After he was 18 weeks in rent arrears, I managed to get the rent payable directly to me. (I'd found the tenant a Basic Bank Account at another bank, HSBC, who didn't mind his history, but he chose to have the rent made payable to me instead.)
Meanwhile, because of the tenant's bank's thus committing what I see as misappropriation of funds, stealing by finding & fraud, I'd had to borrow from my son to pay the bills. (I only had 1 tenant then, usually 2 but I was in middle of a refurbishment.)
The tenant's bank was not only selfish & crooked but also stupid because, if I'd evicted the tenant (& I was very sorely tempted, but I'd've most likely lost all that rent forever), he'd've been very unlikely to've been able to continue to make any loan repayments as a homeless person.
I don't believe that banks should be allowed to call this "off-setting" - it's misappropriation of funds, stealing-by-finding & fraud.

pablohuge · 3 June 2010 at 7:39AM

I recently held an HSBC current account which I had for 15yrs + with no history of missed payments (in that time I had loans and credit cards), at the time I was living with my brother and we had a joint account with HSBC to pay the bills and my brother had a HSBC credit card. Guess what happened when my brother defaulted on his card...... they froze my account (which at this time I had just moved out to live with the missus). I asked HSBC why they had frozen my account but they refused to tell me, unbelievably, and said I need to speak to my brother.
Anyway, needless to say I opened a new current account elsewhere and will no longer have anything that involves HSBC. Not impressed !!!

JIG_2 · 3 June 2010 at 11:00AM

A couple of years ago my wife had an accident in work, the upshot was that we have lost her salary reducing our income by 50% and therefore we could not service the debts we had accumulated over time.

One of the large debts was a Lloyds TSB loan for £25k and paying £469 per month. When I cancelled the direct debit for this loan and wrote to the bank to inform them of our current situation they were fine for a bit, then it got hairy with the ussual demand letters.

I also had a credit card with them with a large limit. Lloyd TSB drained my bank account and £2000 overdraft taking payments for the loan and when that was exhausted they turned thier attention to my credit card and maxed it out (the card had about £3000 left on it)

So setting off back in 2008 with Lloyds TSB was prevalent.

I cannot imagine those people who have to buy medicines and prescription drugs to maintain their health who then find that they have no funds.

However I do agree that if you have a debt you must do whatever you can to service that debt and take responsibility, but there are times when everyone needs help for different reasons and on those occasions banks begin to help themselves. Poor show really.

best wishes to everyone.

chriswa1 · 5 June 2010 at 6:29PM

Hi

Is there a definitive guide to setoff? I have found some information here, with the FSA and the FOS, but not a definitive guide. Surely there must be rules - for example is it simply the ability to seize an asset, or is it the case that a bank can create an alternative debt at a higher interest rate, by making you go overdrawn in another account?? I'm confused, and it appears there is a clear lack of clarity here!

zsazsa_3 · 8 June 2010 at 10:45PM

Does this setoff only occur if you are in arrears? I am up to date with all my monthly payments but I am in major debt I have bi-polar and have been advised to go down LILA route. I have opened a new account and am moving my DD's etc but if I keep paying my payments until I do LILA will I be okay???? I bank with RBS! Really quite scared after reading this

Do you have money worries and a loan or credit card with your bank?

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