bank put a stop on our money!!!!

chambers007_2

Please, please any advice would be grateful.
I will get straight to the point - We had a business account with lloyds tsb, which didn't do to well, we owe £10,000 on the overdraft. We opened another account with lloydstsb (same bank manager arranged this).
We received a bank credit today of £1,500 - but the cash machine swallowed the card - when we phoned office we were told our bank manager had cancelled our cards. We do not have a overdraft on this account, we do not owe money on this account, so can the bank do this?

Will post more info if required, but any advise would be grate

thanks

poorandindenial

Hi Chambers

Banks can yake money from one account to service a debt on another. You may be able to negotiate with them but I don't know what your chances of success are likely to be. Actually I know that they can do this for personal accounts but I am not sure about the business account side of things, that may depend on the way that your business was set up. Try speaking to www.nationaldebtline.co.uk or www.bdl.co.uk (their business debt line counterpart) and between them you should be able to work out your next move

Your best bet is to go today and open an account with a totally unrelated bank and put all your cash in there

Sorry that this is a bit of a non answer - I hope you manage to get this sorted out soon

rugbymum

Okay I may not be of much help but here goes.
If you owe a bank money on one account they CAN take money from other accounts you hold with them in order to pay off what you owe them. It will state something to that effect in your terms & conditions. The bank manager should have discussed this with you.
If you need the money to live off you need to contact them urgently and ask them to release some or all of the funds. Take it easy though, if you go in with all guns blazing they may just say no. Be calm & explain circumstances. they will probably be more receptive if you have a repayment plan for your debt, especially if it is with one of the debt counselling charities.
Open an account with a bank with whom you have NO financial connection ASAP, then this can't happen again.
Above all take independant advice, not from your bank manager, it is in his/her interests to get as much cash from you as possible.
I hope this helps.

fermi

Assuming that the bank has applied their right of "set off" here, then unfortunately they are allowed to do that.

The Financial Ombudsman has a little article in the link below that describes under what circumstances they regard it as fair or unfair for a bank to do this.

Link: banking: firms' right of 'set off'

Unfortunately they don't have to give you any warning.

The basic position is that a firm has a right – but not a duty – to look at a customer’s overall position and to ‘combine’ the accounts held by that customer. This is sometimes called a right of ‘set off’ or a right to ‘combine’ accounts. A firm has this as a general right, whether or not it mentions the right in the account terms

We would not usually expect a firm to warn customers before it exercises its right of ‘set off’. A warning might prompt customers to move their money to an account with a different firm. But we think that it is usually good practice for a firm to tell a customer as soon as possible after it has made a transfer.

Somerset

Don't mean to hijack but would also like clarity.

I assumed business accounts ( limited company ) and personal accounts were totally seperate and 'set-off's' couldn't apply - a limited company being a seperate legal entity. Can any bankers confirm this ??

From the OP's point of view I suppose it depends exactly what the 'business' account was - was it a ltd company, partnership, sole trader etc.

fermi

Somerset wrote: »

From the OP's point of view I suppose it depends exactly what the 'business' account was - was it a ltd company, partnership, sole trader etc.

Yep. That is how I read it.

Certain conditions must be met before the firm can exercise its right of ‘set off’.

• The account from which the firm transfers funds must be held by the customer who owes the firm money.
• The account from which the firm transfers the money – and the account from which the money would otherwise have come – must both be held with the same firm.
• The account from which the firm transfers funds – and the account from which the money would otherwise have come – must both be held in the same capacity by the customer concerned. So, for example, if Mrs C holds a savings account in her capacity as treasurer of a local society, the firm cannot take money from that account to pay Mrs C’s personal credit card bill that she normally pays from the current account she holds in a personal capacity.
• The debt must be due and payable. For example, if a customer misses making a loan payment, then (at least until it calls in the loan) the firm can take only the missed payment – not the balance of the loan.

Jesthar

fermi wrote: »

Assuming that the bank has applied their right of "set off" here, then unfortunately they are allowed to do that.

The Financial Ombudsman has a little article in the link below that describes under what circumstances they regard it as fair or unfair for a bank to do this.

Link: banking: firms' right of 'set off'

Unfortunately they don't have to give you any warning.

Yup, this is true, sadly.

A friend of mine went through a period when she couldn't handle dealing with finances for various reasons. Before that she had an amount of money in a savings account with the same bank as her current account, and without telling her they transferred all her savings into her current account to pay off her overdraft. She therefore carried on her normal spending patterns because the balance requests at the cash machine kept telling her she had money, but that was only because her savings had been transferred! She finally found out when the bank called her to say she was overdrawn, she responded 'that's OK I have some savings to cover that', and they responded 'no you don't, we already took them'. Nice! :mad:

I echo the others - new bank account with a different financial entity time, and transfer your income and bills ASAP so Lloyds don't have anything more to take...

~Jes

chambers007_2

cheers to all responded. just to let you know, we went to our local branch, spoke to that branches manager and they released the money to us.

It was a business account (limited company) so they could not with hold our money. Manager told us only if both business accounts had a link with each other, that they could do that.

So we withdrew all our money and will close account on Monday. We will also have to cease trading now due to not having debit cards etc. (bearing in mind this business does not have any debt)

Not very happy with our business bank manager - he was even avoiding my telephone calls to his mobile, but answered the branches telephone call!

How do I complain about a bank manager (there are other issues I have with him)

thank you to all

(perhaps i might win the lottery tonight )