MSE News: Number 10 to stop banks dipping into your account?

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This is the discussion thread for the following MSE News Story:

"The Prime Minister's office is to investigate banks and building societies' ability to take money from customers' accounts without permission ..."




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  • michaels
    michaels Posts: 28,078 Forumite
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    So I go to a bank, borrow 10k and stick it in a savings account at same bank then refuse to pay back the 10k and the bank has to go to the expense of sueing me to get its money back - another top idea Martin...
    I think....
  • jambosans
    jambosans Posts: 1,493 Forumite
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    Does a bank account really belong to the customer? I wouldn't have said so. The money deposited in a bank account is a facility provided by the bank under their terms and conditions.

    A debt in dispute with the bank is one thing, however I hardly see a debt being paid with credits made elsewhere within the same business an issue.

    If this practice was to change, e.g. a bank had to inform you before setting off, it would make the process a little pointless. Those not willing to pay arrears would simply remove the deposits from the bank.

    Another win win for the financially irresponsible.
    Anything I post is my opinion, so from time to time I may be wrong. I try to provide answers based in fact, however I don't know everything, so (like all posters on MSE), take what I say with a pinch of salt.
  • MarkyMarkD
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    I can't disagree with anyone else here - apart from Martin of course.

    The language he uses is nonsense.

    Banks don't simply "decide" you owe them money, and take it from your other accounts. They only offset to recover arrears on other debts - which are almost inevitably amounts which are explicitly due under contract between you and the bank.

    Why should those who actually pay their debts suffer because those who don't, want to make it even harder for banks to get the money they are rightfully owed?
  • jambosans
    jambosans Posts: 1,493 Forumite
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    MarkyMarkD wrote: »
    They only offset to recover arrears on other debts - which are almost inevitably amounts which are explicitly due under contract between you and the bank.

    Exactly, and I would also like to point out that offsetting is something that only occurs (generally speaking) when no attempt has been made to resolve the debt. The customer in arrears would have had plenty of contact and opportunity to resolve the debt with the bank amicably (i.e. arrange a repayment plan).
    Anything I post is my opinion, so from time to time I may be wrong. I try to provide answers based in fact, however I don't know everything, so (like all posters on MSE), take what I say with a pinch of salt.
  • jago25_98
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    The banks are more powerful than the government and ministers know it.

    Which is why they don't answer when questioned on any number of the problems regarding banks, bonuses being just one of those problems.
    Order of events: Banks lose our money -> get bailed out -> were inflating GBP to cover it -> now taxing us -> next will grab your funds direct -> things get really desperate to balance the books. What should have happened?: banks go bust and we lost our money much quicker
  • never-in-doubt
    never-in-doubt Posts: 20,613 Forumite
    edited 25 September 2009 at 1:46AM
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    The whole point is the banks have too much power and the BT example was sufficient. Whats the problem exactly? Banks have got to learn to follow the same laws as everyone else - quite simply it should be theft if they dip into another account.

    For instance, what about disputed balances? Hardly think the bank will bother too much investigating when they have nothing to lose? Kinda means all the leg-work has to be done by you when it should in fact be the bank who has to prove the debt, not the customer.

    So, the BT scenario comes back into play - if they send you a bill saying you owe £500 for ringing sex lines and you know you never then you'd not pay, they'd disconnect you and finally take you to court (lets stick to a 3 process scenario for ease)

    Reverse this back to the banks; someone clones your card and PIN and spends on it, you refuse to pay cos the bank say its foolproof and cannot be fraud so its your fault (happens a lot), the bank then dips into your savings account and leaves you to chase a refund/prove your innocence.....

    That says it all - banks have way too much power.

    Well done Martin - keep up the good work :money:
    :o 2010 - year of the troll :o

    Niddy - Over & Out :wave:
  • blind-as-a-bat_2
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    michaels wrote: »
    So I go to a bank, borrow 10k and stick it in a savings account at same bank then refuse to pay back the 10k and the bank has to go to the expense of sueing me to get its money back - another top idea Martin...

    That is what any other loan company would have to do in that scenario, they cant just go into your account and take it:confused:

    But as per usuall is also the most extreme example to tarnish what Martin is trying to achieve.

    As the above poster points out, money is not always owed, they gave one example, but there are many.:rolleyes:
    Thats it, i am done, Blind-as-a-Bat has left the forum, for good this time, there is no way I can recover this account, as the password was random, and not recorded, and the email used no longer exits, nor can be recovered to recover the account, goodbye all …………. :(
  • Nathan_Spleen
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    MarkyMarkD wrote: »
    Why should those who actually pay their debts suffer because those who don't, want to make it even harder for banks to get the money they are rightfully owed?


    What do you mean by ''even harder for banks to get the money they are rightfully owed'' ?

    But then again it must be terribly difficult to be forced to go through the laboriuos and pain-staking task of having to debit someone's account. I'd imagine it could even involve someone in the bank having to be awake at the time.

    Any ideas on how we can streamline the process then?

    Seriously though, as blind-as-a-bat alluded to, it's really a competition issue.
  • esmerellda
    esmerellda Posts: 2,237 Forumite
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    I have never understood why people keep all their eggs in one basket. It makes sense to me that if there are arrears on a loan account with the same bank who you have a healthy savings account with, the arrears can be taken from the savings to cover the loan. It's what people should be doing anyway and surely it is what savings are for, times when you get in trouble and need to cover your payments. They can only take arrears amounts. It stops arrears building up and interest and charges worsening the situation. If you wanted to chose because you have other priority debts to pay using the same fund then arrange it in advance, you do have to get quite a lot behind before offsetting is implemented.

    If you don't want this to happen then keep your products in seperate banks.

    Sometimes the banks do get it wrong, they should be stopped taking money from savings and other current accounts with the same bank where a debt IS in dispute, as they seem to do this far too often especially with overdrafts made up of disputed bank charges.
    LegalBeagles
  • Rafter
    Rafter Posts: 3,850 Forumite
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    I think it was a number 10 aide that suggested this rather than Martin.

    It does seem a bit of a daft idea and kind of says that banks are incapable of operating within the law and are taking money which isn't lawfully due from them.

    I suggest common sense and strong consumer protection laws should solve the problem. If a bank takes money that is not due to them or if a dispute or complaint has been logged by the customer, they should pay compensation to the customer and a fine into the FSCS or a hardship fund.

    R.
    Smile :), it makes people wonder what you have been up to.
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