Bank keeping my benifits to pay overdraught

simon_templar_2

That does not refer to bank charges, eg unauthorized overdraft charges. Benefits are a source of income like wages are.

I_know_my_ABC_and_my_CMYK

simon_templar wrote: »

The bank can take bank charges from benefits. It is an urban myth that says they cant.

Sorry wrong. They cannot take benefit money for charges.

jonesMUFCforever

Whether it is illegal or not IMO the bank can take any monies received to clear overdrafts and charges.

How come OP can spend bank's money (overdraft) but it is not fair when they ask for it back??

simon_templar_2

The purpose of the Social Security Administration Act 1992 Section 187 and section 45 of the Tax Credits Act 2002 is to prevent people’s benefit money being at risk by it being assigned over to a third party in settlement of a debt. It is not intended to prohibit the application of bank charges. Bank charges are in the nature of an expense, and are incurred by the holder of the account; tax credits and benefits are payable in order to help customers meet their expenses, and as such it is legitimate for banks to deduct charges from the balance of an account held in that bank, whether the money paid into the account comes from tax credits, benefits or other sources, such as earnings.

frepol

Why would anyone with a shred of morality want to confiscate a person's benefits to pay a bank charge(s)? Why would anyone look for a reason to justify them? The banks may have gone tits up because of their shareholders' greed but is it really that bad? JSA is effectively a government payment - have their not had enouh government money without taking benefits as well? 2 charges would wipe out a fortnight's Jobseeker's Allowance. How does that person eat, pay for electric etc. Then other DDs come in and guess what - more charges! Very little option these days but to receive benefits by DC and pay bills by DD. The system is wrong.

I_luv_cats

While you argue the toss / seek advice with regards to Abbey ask the DWP to pay you by giro cheque (you cash it at the Post Office) until you give them a new bank account number (Post Office Account or a Basic Bank Account)

simon_templar_2

My last post is a qoute from the govt so you should perhaps ask them why.

frepol

Like I say the system is wrong, although the same does go on to say that 'The Government believes that people should have reasonable access to their benefits.'
Why though anyone would want to justify them is another story.

simon_templar_2

Dont think anyone is, just pointing out the facts. But then again some people want it the way they think it should be and not the way it actually is.

Extant

simon_templar wrote: »

The purpose of the Social Security Administration Act 1992 Section 187 and section 45 of the Tax Credits Act 2002 is to prevent people’s benefit money being at risk by it being assigned over to a third party in settlement of a debt. It is not intended to prohibit the application of bank charges. Bank charges are in the nature of an expense, and are incurred by the holder of the account; tax credits and benefits are payable in order to help customers meet their expenses, and as such it is legitimate for banks to deduct charges from the balance of an account held in that bank, whether the money paid into the account comes from tax credits, benefits or other sources, such as earnings.

Yes, we have all read Number 10's answer. And by the way, Number 10 is not the government - it is the office of the PM.

And with that said, Number 10 is not our authority in the banking world, and is not an authority in and of itself anyway.

The FOS is one of the authorities we look to in day to day operations, however. They have made it quite clear that they do not consider it to be fair for banks to use charges to repay debts if this then prevents the recipient from using them for their intended purpose - i.e. to live on JSA, child benefits not going to the child, etc.

Number 10's interpretation of the law is clearly different from that of the FOS - and considering the FSA's heavy pressure for us to treat customers in financial difficulties fairly, there's nothing to argue here - the FOS will side on the customer on this one.