Benefits and Bank Charges

gratton20 · 21 November 2007 at 6:40PM

Hi everyone,

I usually post on other boards but also had a problem as all our benefits go into wifes step (basic) account at Natwest and they bounced a DD which would have put her £1 overdrawn ... and charged, same day £38 for doing it. Paid in the dosh same day but still wouldnt refund .. now found out about this SS act and decided, to try it and see if it works the trick as we really cant afford to loose £38 Not sure if all our benefits covered as we are on CB, DLA, IS, Carers allowance, Tax Credit but here is a letter I just posted to our branch ... I will post agin and update people on if it works.

==================================================

22 November 2007
The Manager
Nat West Bank Plc
Anytown AB1 2DD

Dear Sir /Madam

Account Number: %%%%%%%% Mrs B Nuisance

On 3rd October 2007 you charged me an unpaid item fee of £38 in respect of an unpaid direct debit for the sum of £24.39 which had it been paid would have left my account in an overdrawn state. This would have made the account less overdrawn that it was when you applied a charge! I paid in money to cover the debit balance on the SAME DAY as the direct debit was refused and requested, in branch, that the charge be cancelled and I was refused.

I have now taken professional advice on this matter and would direct you to the provisions of “Social Security Administration Act 1992" - the relevant subsection included below.
Social Security Administration Act 1992
Miscellaneous
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
(c) 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.

** inalienable = not to be forfeited.

I am advised that the effect of this legislation is to make it unlawful, regardless of any terms and conditions imposed by the bank upon an account, for you to take charges from any money deposited which is solely consisting of Social security benefits - which as you are aware my account is.

I therefore formally request that you refund into my account within 28 days the sum of £38 and advise me to that effect.
I look forward to your response in due course.
Yours faithfully

===============================================

krisskross · 21 November 2007 at 11:34PM

I think you may well find that that particular Social security Act is about having benefits taken as security. It used to be that child benefit or other payment books were taken as security from borrowers by lenders.

Any money going into a bank account from whatever source is just income and can be taken by the banks if charges are levied. Otherwise what would there be to stop people on benefits (a goodly proportion of the nation) running up debts to the banks, then saying the banks are not allowed to charge for the unauthorised overdrafts created.

You can certainly ask them not to take benefit income but I am certain there is no law that prevents them doing this. Perhaps you would be better not having direct debits ,withdrawing your money and paying everything with cash. No chance of small errors costing you dearly then.

gratton20 · 3 December 2007 at 4:14PM

Hi

I promised to update the forum on the progress of my letter to Nat West and here goes ..

I WON!!

Nat West head office just phoned up and said they apologised for taking the fee and that they agree they should not have taken it as I am on benefits only and the money will be paid back into the account in full today.

Great result, although I realised it is not in writing so maybe others would have trouble getting the same result as it probably is a legal grey area and no doubt Nat West were not 100% sure but felt it not worth the trouble in case I took it to court .. anyway, well done Nat West!!!:T :T :T

Hope this may help other people too.

kurjam · 3 December 2007 at 4:34PM

do you know the address for head office for natwest ??
the same happened to me with natwest and my local branch say they do not have to refund charges, so i want to write to head office ..
thank you

gratton20 · 3 December 2007 at 4:51PM

Hi,

I wrote to the branch manager at my branch. It seems they then pass it on to head office. Did you pay in money to cover the o/d bal same day as it was due as I understand this plays a part in them deciding to refund the charge even if they dont think they have to by law ... and I am fairly sure, as others have said, that the law in SS act is about keeping money as security and doesnt really apply here ... (My letter being a bit of a "bullsh*t baffles brains" .. try it and see effort!) it may well be that if you pay in to cover the debit same day they have a policy of refunding if you write and ask. I would suggest you be very polite and use the template letter like I did, - if you didnt cover the o/d balance same day i suspect you may have more problems tho... good luck!

bestpud · 3 December 2007 at 6:48PM

In my experience, banks will often refund a one-off charge where the amount has been small and the customer has made an attempt to cover it.

This is nothing to do with being on benefits - it's just about kicking up a fuss because the computers don't distinguish between genuine or one off errors and people taking the ****.

I can't see why they should not be able to levy a charge purely because someone is claiming benefits.

Don't get me wrong, I am no fan of banks and they need to reduce their charges full stop.

However, one minute we blame them for getting people into debt and the next we are saying they should not discourage poor financial management.

gratton20 · 3 December 2007 at 8:07PM

Bestpud - I agree poor money management should not be encouraged, but on the small income we had it can be very easy to now and again miscalulate. people on a good income almost always have an overdraft facility even if they dont want/need it, and can afford to be lax and I bet often would be in same prob as we were if they couldnt go overdrawn, bet they dont notice it when it happens by a couple of pounds .. but thats hardly poor money management .. if you got lots its easy to manage

I think the probable reason it was refunded has nothing to do with benefits .. more as you said because we paid in straight away and only ever done it once and it IS a gesture of goodwill ... in any event I got a result so i am happy LOL

bestpud · 3 December 2007 at 8:22PM

I do understand how it is hard to live on a low income as I do - I've also lived on benefits.

At the monent, we are struggling to get our overdrafts down and pay stupid amounts of interest every month so I don't condone the banks charging at all.

I guess I was questioning how far banks should be held responsible for people going overdrawn and I feel it would be a mistake to remove charges for people on benefits. Having lived pretty much hand to mouth I think it could be the start of a slippery slope.

LadyMorticia · 7 December 2007 at 4:59AM

What are these bank charges meant to be for?

Please excuse my ignorance but I've never had this happen to me before.

xx

kurjam · 3 January 2008 at 3:14PM

gratton20 wrote: »

Hi everyone,

I usually post on other boards but also had a problem as all our benefits go into wifes step (basic) account at Natwest and they bounced a DD which would have put her £1 overdrawn ... and charged, same day £38 for doing it. Paid in the dosh same day but still wouldnt refund .. now found out about this SS act and decided, to try it and see if it works the trick as we really cant afford to loose £38 Not sure if all our benefits covered as we are on CB, DLA, IS, Carers allowance, Tax Credit but here is a letter I just posted to our branch ... I will post agin and update people on if it works.

==================================================

22 November 2007
The Manager
Nat West Bank Plc
Anytown AB1 2DD

Dear Sir /Madam

Account Number: %%%%%%%% Mrs B Nuisance

On 3rd October 2007 you charged me an unpaid item fee of £38 in respect of an unpaid direct debit for the sum of £24.39 which had it been paid would have left my account in an overdrawn state. This would have made the account less overdrawn that it was when you applied a charge! I paid in money to cover the debit balance on the SAME DAY as the direct debit was refused and requested, in branch, that the charge be cancelled and I was refused.

I have now taken professional advice on this matter and would direct you to the provisions of “Social Security Administration Act 1992" - the relevant subsection included below.
Social Security Administration Act 1992
Miscellaneous
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
(c) 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.

** inalienable = not to be forfeited.

I am advised that the effect of this legislation is to make it unlawful, regardless of any terms and conditions imposed by the bank upon an account, for you to take charges from any money deposited which is solely consisting of Social security benefits - which as you are aware my account is.

I therefore formally request that you refund into my account within 28 days the sum of £38 and advise me to that effect.
I look forward to your response in due course.
Yours faithfully

===============================================

thanks for this i got £38 refunded today.
my local branch would not do this said it was my fault and they had contacted head office who refused to refund me.
so i wrote to head office and yes they have written to me and the refund is in my bank today !!!:j

Benefits and Bank Charges

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