Can Bank Take This Money??

Amanda_S_2

Hello, my friend had an overdraft on his bank card then shortly after went into prison for 18 months. He wasn't able to pay due to his situation or have help in contacting bank to tell them of situation and the debt with charges ran to about £7000 over time.The debt was eventually passed onto a debt collectors.

A couple of weeks before he came out the debt collectors agreed to settle for £4000 in monthly payments of £1000 but he didn't get the letter.When he came out of prison he promptly cashed an ISA into his account in order to raise some money for accomodation etc.A few days ago, he was shocked to find that the bank had taken the money (£3000) without notification. Can the bank do this? He assumed they had handed it over to a debt collectors and was prepared to pay in installments. Now he is homeless as a result of having this money he relied upon to pay a deposit and essentials on private accommodation.

anniecave

this should be on the current accounts forum.

Just because an account has gone out to a debt collection agency it doesn't mean the debt is no longer on the books of the original company. Some collection agencies do buy debt off companies, but most just chase debts on behalf of the original company

So if he paid into the same account as the debt was built up on, then yes the bank can use any money paid to offset against the debt

skintandscared_2

Unfortunately for your friend, yes I believe the bank can do this.

I understand that your friend would not have had the financial means to do anything about his overdraft situation while in prison, but prisoners are allowed to make telephone calls and send letters. Initially it may not have been at the forefront of their mind or priorities, but 18 months inside gives you plenty of time to think about things... Did he think they would just close the account and forget about it?

Amanda_S_2

skintandscared wrote: »

Did he think they would just close the account and forget about it?

No, he intended to sort it out upon his release.Whilst in prison, he wrote several letters to bank but got no reply. Not sure if this was fault of bank or prison postal service.

Thanks for both your responses. Much appreciated. I'll pass this info onto him.

skintandscared_2

Amanda_S wrote: »

No, he intended to sort it out upon his release.Whilst in prison, he wrote several letters to bank but got no reply. Not sure if this was fault of bank or prison postal service.

Thanks for both your responses. Much appreciated. I'll pass this info onto him.

If he wrote to the bank then that's really bad that they didn't suspend the account or at least get back in touch with him. And I don't suppose he was in a position to take copies of the letters he sent either... I don't know whether next of kin are allowed to deal with financial matters on a prisoner's behalf if they won't correspond to someone in prison, but I suppose Data Protection prevents them discussing a person's account with someone else. I know my step-son was in prison and had arrears outstanding on something, and he had to be accompanied to court for a day from prison to deal with that, then go back. They corresponded with him inside so I'm surprised the bank ignored him. Hope he can get something sorted out.

**added** He definitely wants to open a new basic bank account for any benefits or wages to go into from now on, so the old bank can hold on to any more!!!

Amanda_S_2

Hi there . I did try and make an attempt to sort out the debt collectors on his behalf and you're right in saying that they won't deal with third parties due to the data protection etc.

The better news is that he's visited the bank today and explained his situation. Upon seeing proof of his stay in prison they have agreed to give him back £1500 and pay the remainder of balance at £10 per month.

skintandscared_2

That's brilliant news. I was wondering how he got on. Hopefully he can clear it now, put it behind him and get on with the rest of his life :T