Taking O/d Charges Out Of Benefits

TIRkiz_2

Hi, sorry in advance if this is posted in the wrong place.

Can anyone tell me if it's true that banks aren't allowed to take their Overdrawn charges from your account if your only income into the account is from benefits?
My daughter is suffering severe financial hardship every month as her bank (HSBC) is repeatedly reclaiming their charges from her Child Benefit/Child Tax Credits/Income Support when they are credited to her account.
She is constantly having to apply for Crisis Loans (which are repayable) to buy food & nappies for her children.

Any advice at all would be much appreciated.

Obukit

Yes, but you need to tell them first. See this thread on the CAG forum.

Remember also that this won't stop HSBC's charges, merely mean that she'll appropriate (force the bank to allow her to use) the money for something else. She should also apply separately to have her bank charges stopped and those to date refunded, or else her overdraft will build up and HSBC will likely close her account and refer it to a debt collection agency, which will be even more stressful.

ShelfStacker_3

No, it's not. It's commonly accepted wisdom that they can't, but legally there isn't anything to stop them doing so.

If she is in hardship, she has a good case for getting the charges stopped and any past charges refunded. Ask her to get in touch with HSBC, stating that she is in financial hardship and needs help with the charges.

ShelfStacker_3

Just so nobody thinks I'm just parroting the bank's line (which I don't honestly know), a quote from Martin:

It’s also mooted that taking charges out of benefit payments, such as Income Support or Job Seekers Allowance, breaks another law called the Social Security Administration Act 1992, yet this doesn’t actually cover the deduction of bank charges.

SparciaM

According to the Banking Code, the bank has to do all they can to help you out. So taking charges from benefits is in clear breach of this if they don't offer another way of paying these charges.

You can complain about them not adhering to the code. Obviously, ringing them and explaining the situation is always the best thing to do.
Please note, that the Banking code is voluntary, so even if they say they subscribe to it, doesn't mean that have to actually adhere to it.

CLAPTON

tell her to open a new a/c immediately and arrange for her income to be paid there.

TIRkiz_2

Thanks for all your help.

She is only 19yrs old so not at all experienced in banking procedures or complaining (always had mum to do that for her:mad: ).

I will follow up your advice asap.

many thanks

TIRkiz_2

With reference to the letters of Appropriation she will need to submit (1 for each of her benefits).

Would it be advisable to list advance weekly payment dates for each benefit that she receives as they are all paid into the account weekly but on different days?

ie. Child Benefit £** due to be paid on 18/11/08, 25/11/08, 02/12/08....

Or, can this right only be exercised if submitted separately prior to each individual weekly payment being made?

Many thanks

savagej

It is not a misconception it is in law that a bank cannot take Social Secutiry Benefits off of your for anything (you just have to call the DWP and they will tell your bank to give you the money, otherwise the are breaking the law). It has further been accepted in court cases when the bank refused that it is illegal.

The bank should know this.

FlyHigh_2

I don't believe thats correct savagej, as has been quoted on this site many times previously, charges aren't covered by the SS Act. The act ensures that there are to be no attachments made to benefits not that you can be exempt from charges if you have benefit payments in your account.

And as response to the OP, definitely give the banks the right of appropriation forms and try to see someone in a branch to see if theres any arrangements they can make to stop / ease the charges

Rikki

Thats why having your benefits paid into the post office card account was a better idea.

It might be worth seeing if they are still available. They work the same as the old benefit books. The money is paid in and you use your card to take the money out at any post office.