'Huge anger over HMRC wanting to raid people’s savings' blog discussion

Former_MSE_Paloma · 5 August 2014 at 1:09PM

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "Huge anger over HMRC wanting to raid people’s savings – but why do we let banks do it already?" Blog.

Please click 'post reply' to discuss below.

jamesd · 5 August 2014 at 1:41PM

I agree, we now have better law in place than that around when the right of offset was of use. Both it and the corresponding contract-based term used by non-banks should be prohibited.

I had an interesting experience with First Direct where if I'd overpaid on a flexible offset current account mortgage they would have seized the money in the mortgage account. They couldn't because I knew of this risk and had left the money in the offset savings account. What happened was their security team taking a dislike to me buying currency in the most efficient unit size/amount even though the week earlier their normal customer service had agreed to 60 of those transactions. Until they listened to the call the security team was going to do that seizing, convert my mortgage to a standard mortgage and close the offset current and savings accounts. All for completely legal transactions that didn't breach the account terms.

Unconventional lenders aren't necessarily better. I had one of the P2P lenders overcharge me interest in two different ways on the same loan, issue incorrect annual statements and so far they are declining to refund the interest for the periods covered by the incorrect annual statements.

Paul_Herring · 5 August 2014 at 2:32PM

Yet I thought it worth pointing out that while we object to the taxman doing it, we have already given banks the power to do something very similar

Apples to oranges I'm afraid.

One is subject to the laws of the land (with various ways round the setting off rules such as don't hold savings with the same institutions you have debt with,) the other is the government who are able (and are) changing those laws on a whim.

MSE_Martin · 5 August 2014 at 3:02PM

Paul_Herring wrote: »

Apples to oranges I'm afraid.

One is subject to the laws of the land (with various ways round the setting off rules such as don't hold savings with the same institutions you have debt with,) the other is the government who are able (and are) changing those laws on a whim.

I think its oranges to satsumas. These are very similar but not identical. Many people are totally unaware of this right from the banks (just read the facebook discussion from the blog) therefore it works in practice the same way.

The point still stands. Neither should be allowed. We have a court system, its job is to order money to be paid - at that point I accept raiding bank accounts. Not before (unless for tax injunctive risk of unfair money flight)

jk0 · 5 August 2014 at 3:40PM

That's why it's important not to take a credit card from the same bank as you bank with.

If you listened to Osborne's speech when he announced this about HMRC, he let slip that it was the IMF that was making him do it.

bexhill · 6 August 2014 at 8:53PM

It was the case that banks had to ask you to sign a letter of set off to give them permission to set off balances of credit account/s against overdrawn accounts. I have not aware that I have ever been advised otherwise and not having given the Bank a mandate to manipulate my accounts I would suggest that an unauthorised set off is illegal.
The failsafe is as suggested keep your borrowing with a different banking group to that which has any account with a credit balance.
Similarly take care with direct debits that they don't take money from your account which you need for more urgent purposes.

Paul_Herring · 6 August 2014 at 9:09PM

bexhill wrote: »

It was the case that banks had to ask you to sign a letter of set off to give them permission to set off balances of credit account/s against overdrawn accounts.

Now it's in your T&C's.

bowlhead99 · 10 August 2014 at 10:31AM

MSE_Martin wrote: »

The point still stands. Neither should be allowed. We have a court system, its job is to order money to be paid - at that point I accept raiding bank accounts. Not before (unless for tax injunctive risk of unfair money flight)

I'm not sure I agree with this - though I can understand that this is a consumer champion website and so one would expect it to be taking that stance rather than being on the banks' side.

If I give a pal £1000 for safekeeping and never pay him back that £100 I owe him, I understand that he doesn't want to give me over £900 back. To have him need to take me to small claims court for the £100 would seem OTT. Maybe that's an 'oranges to satsumas' analogy too as he is not a regulated financial services business but it is not in my mind an abuse of power or trust.

Looking at the blog post, the woman who had not repaid some sort of debt to the bank on time but wanted to splash out on a wedding via her account should have first faced her responsibilities. If the bank 'immediately snaffled' the wedding fund it sounds like we are not just talking about her owing a tenner for overdraft fees.

Alternatively if she didn't want to face up to those debts, she could have 'hidden' the wedding money at a rival bank ; or had the family member pay it for her direct rather than dump it into her own account en route. Those latter two options are perhaps morally objectionable (if you come from a camp that believes people should pay off their overdue debts before taking the family gift and blowing it on a wedding party), but certainly spinning a sensationalist soundbite like 'bank snaffled my wedding fund' is going to drive more site traffic and garner support for the consumers versus banks crusade.

mjm3346 · 10 August 2014 at 12:10PM

Where is this "huge anger"? Certainly isn't huge by numbers, presumably just a "very very small" percentage of the population really really really really angry.

Buzby · 10 August 2014 at 3:51PM

And still some folk wonder why Scotland has an appetite for independence? At a stroke of a pen (two strokes, actually) we get a chance to give HMRC it's marching orders. There will be a replacement, of course, but one that is expected to be less interested in using bullying tactics.

Even the recent hounding of Rangers FC (where HMRC have already lost TWO appeals) and are trying again for their third, is testament to many that the opportunity to change should not be wasted.

Consumerist · 29 August 2014 at 12:44PM

There was a time when HMRC could be trusted to get things right but these days they are just incompetent. Should such a dysfunctional government agency be given the right to raid our savings accounts without having to demonstrate their right to do so?

'Huge anger over HMRC wanting to raid people’s savings' blog discussion

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