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MOG 789 · 07-10-2009, 9:07 AM

Hi, I'm new to this but I wanted to know if this was legal,
About 18 months ago, my bank account went overdrawn at the start of the month when all my direct debits were taken, this was a usual thing, my bank would then phone or send out a letter and I would either transfer money from my business account or deposit some funds to bring the account into the 'black', although sometimes, I could have some time to gather the funds and deposit within a week or so. It was shorthly after xmas 08' and having telephone banking I rang to hear the balance on my account and it told me there had been a deposit of £3200.00 into my account, I hadnt or my wife hadnt deposited so I rang the manager who told me he had charged my credit card (which was with the bank) the amount to cover my DDs. The year previous to this I had cleared my credit card with a loan because I couldnt pay it back monthly, I since had to do the same with this debt as again my card was 'maxed' out.
My question is that, although I think there is a mechanism from many years ago that banks have the power to take funds from accounts to cover costs in other accounts, my credit card shouldnt fall into this, especially without my knowledge as it has a totally diffferent set of guidelines/interests/policies, and technically I am being charged interest without agreement, I since moved branches but stayed with the same bank as I lost confidence in the staff there, but what can I do, if anything, or is this legal? Please Please advise,

Confused and frustrated Newbie!

natweststaffmember · 07-10-2009, 1:39 PM

Quote:

Originally Posted by MOG 789

Hi, I'm new to this but I wanted to know if this was legal,
About 18 months ago, my bank account went overdrawn at the start of the month when all my direct debits were taken, this was a usual thing, my bank would then phone or send out a letter and I would either transfer money from my business account or deposit some funds to bring the account into the 'black', although sometimes, I could have some time to gather the funds and deposit within a week or so. It was shorthly after xmas 08' and having telephone banking I rang to hear the balance on my account and it told me there had been a deposit of £3200.00 into my account, I hadnt or my wife hadnt deposited so I rang the manager who told me he had charged my credit card (which was with the bank) the amount to cover my DDs. The year previous to this I had cleared my credit card with a loan because I couldnt pay it back monthly, I since had to do the same with this debt as again my card was 'maxed' out.
My question is that, although I think there is a mechanism from many years ago that banks have the power to take funds from accounts to cover costs in other accounts, my credit card shouldnt fall into this, especially without my knowledge as it has a totally diffferent set of guidelines/interests/policies, and technically I am being charged interest without agreement, I since moved branches but stayed with the same bank as I lost confidence in the staff there, but what can I do, if anything, or is this legal? Please Please advise,

Confused and frustrated Newbie!

Can I ask if you have already asked the bank the question?
If you haven;t then ask them because the Right of Set Off does NOT include taking money from the credit card to pay the current account as far as I am aware.

MOG 789 · 07-10-2009, 2:20 PM

no, but informally I asked someone I knew at the bank and they gave me a number for complaints and the ombudsman, but I dont know whether to approach the bank or some independent institution as I have settled the credit card by way of a loan with the bank, but if they were in the wrong although I should at least get the interest applied to the card for the year and to the loan reimbursed shouldnt I?

natweststaffmember · 07-10-2009, 2:28 PM

Quote:

Originally Posted by MOG 789

no, but informally I asked someone I knew at the bank and they gave me a number for complaints and the ombudsman, but I dont know whether to approach the bank or some independent institution as I have settled the credit card by way of a loan with the bank, but if they were in the wrong although I should at least get the interest applied to the card for the year and to the loan reimbursed shouldnt I?

Ask them the question first and then we will see what their answer is. At the moment, this is merely asking them the question how they are able to do this. The rules of the Right of Set Off are clear
http://www.financial-ombudsman.org.u.../40_setoff.htm
I am not sure they followed them correctly so I would query the right they have to do it and if it is unsatisfactory, we will have to think of something that is rational and reasonable to do under the circumstances.

MOG 789 · 07-10-2009, 2:55 PM

Quote:

Originally Posted by natweststaffmember

Ask them the question first and then we will see what their answer is. At the moment, this is merely asking them the question how they are able to do this. The rules of the Right of Set Off are clear. I am not sure they followed them correctly so I would query the right they have to do it and if it is unsatisfactory, we will have to think of something that is rational and reasonable to do under the circumstances.

I have just rang the customer services, and I have lodged an official complaint, I should hear back within the week either by phone or in writing, I will keep you posted. The link you attached was very helpful and it doesnt mention charging credit cards, but I will wait for an answer,
Thanks again, I really appreciate your advice!

MOG 789 · 03-11-2009, 7:17 PM

hi,
the bank rang today and have offered a settlement of a refund of interest applied to the figure over 9 months it was on my credit card account until it was cleared (of course this minus the actual interest that would have been applied if they had just over drawn my bank account) and a 'good will' gesture of 300 to put an end to it. I have asked for the offer in writing, they agreed to do this. Then an hour later the manager rang again to say that they hadnt got a chance to write the letter as they were waiting on 'legal' to get back with wording. They asked again as they did in the first phone call to come in to the branch to settle in person. As I spoke to her she was unwilling to accept that what the then manager did was unlawful or that at least agree when I suggested that if another institution applied a charge to my credit card without my knowledge that it would be fraudulent, at this the tone changed and became quite threatening that 'Legal' would take very serious accusations of illegal actions. After I calmed THEM down I assured I didnt want anyone to get sacked over this, but just wanted them to accept what they did was wrong and to put this in writing along with the offer of settlement, they agreed to do this. What do you think I should do, are they just trying to cover this up and move on or should I wait and see how they word the letter? If they dont accept liability in the letter (which I'm sure they wont) should I take this further? Is this offer enough to prove they are in the wrong? Please advise

natweststaffmember · 03-11-2009, 8:09 PM

No but they are certainly admitting that they did wrong. When you receive the letter can you type it up as I am not quite sure I understand the interest they are refunding.
Is the £300.00 separate to the interest bit?

MOG 789 · 03-11-2009, 8:40 PM

yes they have calculated interest refund of £184.00, they got to this number from adding the credit card interest over the 9 months applied to the amount owed and they have deducted what the figure would have been if they had just overdrawn my account as there would of course have been interest applied to the overdraft facility, and the 300 is a gesture of good will for my upset etc.

natweststaffmember · 03-11-2009, 8:47 PM

Quote:

Originally Posted by MOG 789

yes they have calculated interest refund of £184.00, they got to this number from adding the credit card interest over the 9 months applied to the amount owed and they have deducted what the figure would have been if they had just overdrawn my account as there would of course have been interest applied to the overdraft facility, and the 300 is a gesture of good will for my upset etc.

They really really cocked up BIG time cos £300.00 is a very big amount considering what they have done.
Another question, has the credit card amount now been paid off or is it still being repaid and how much is left to go?

MOG 789 · 03-11-2009, 8:50 PM

the credit card was cleared last December as part of an extension of a loan I had with the bank in a sort of 'consolidation' process, I have mentioned that I had to do this in todays phone call and they acknowledged that they have noted this

natweststaffmember · 03-11-2009, 8:55 PM

Quote:

Originally Posted by MOG 789

the credit card was cleared last December as part of an extension of a loan I had with the bank in a sort of 'consolidation' process, I have mentioned that I had to do this in todays phone call and they acknowledged that they have noted this

mog, this is a tough one because you have a number of considerations.
Before you receive their response think about it this way. They messed up and they have to correct this. The question is what was the scenario before this all happened?
How would you have resolved it at that time?
Is the consolidation loan more expensive or less expensive than the way you would have sorted it out?
Have a good long think about this and how much you are out of pocket sorting this out.
Sleep on the questions I have asked and repost up tomorrow what your thoughts are, ok?
It's a good offer but let;s think about the right offer rather than the just under £500.00 they are offering today.