Unauthorised money transfer by my bank!

Scorpy_2

I need some advice please would be greatful for any information you can give me.

My husband took a telephone call earlier today in regards to our joint bank account. As we had gone over our authorised overdraft limit the bank suggested we transfer money from our savings account to our current. Now the money in the savings account my husband replied was for building work therefore at the time he had to discuss the issue with me. Therfore, he did not agree to any money being transferred and ended the call telling the bank he would get back to them after discussing the issue with his wife.

However, on checking the current account online 10 minutes later we discovered the money had been transferred without his consent or authorisation.

Straight away my husband rang the bank (very annoyed:mad: ) and the bank admitted that NOONE should have transffered anything without our authorisation. They said that that department is now closed and that someone will ring us back on Monday

Is this right? Are they allowed to do this?!!!!!!! Is there anything we can do about this?

ts_aly2000

Traditionally yes, if for example you have a credit card, and say a savings/current account with the same issuer. It's written deep in their terms and conditions that they can take funds from one account to service another with a negative balance.

But as for an account in good standing and customers' that conduct their affairs responsibly, this is a very underhand practice. Although as mentioned, deep in the T&Cs.

Generally the concenus of opinion is for example to have your savings, current, and credit card accounts all with different providers. Such that they can never interfere with one another.

But technically if you have a negative balance on the other account and a positive on the other, this does sound somewhat justified in balancing the books. You no longer owe the money on the overdraft.

The question is; Has this action prevented you from attracting any unauthorised overdraft charges and penalties? If it has then that makes things a bit more palatable.

Scorpy_2

i can understand what you are saying but when my husband rang to complain the customer service rep did agree with him that it was not right and that the transaction should have been authorised by him

grumbler

Scorpy wrote:

Is this right? Are they allowed to do this?!!!!!!! Is there anything we can do about this?

You should be grateful to your bank that they take care of you. Unauthorised overdraft is a very expensive thing (for you). Other banks prefer just to charge you unauthorised overdraft fee and higher interest rate than wasting time on telephone calls and making transfers that you are supposed to do yourself. You don't lose anything as a result of this transfer; you only save your money.

And generally it is a very bad idea to keep money on a savings account when being overdrawn. See Martin's guide Starting Saving :

Pay off debts before saving

The reason is simple, it’s likely what you’re earning on your savings is much less, after tax than debts cost you, so use your savings to pay off your debts and you’re quids in.

The amounts speak for themselves. On a typical high street credit card £1000 debt would cost you around £170 in interest over a year. In even the best savings account £1,000 would pay you around £40 interest after tax. So if you used your £1,000 of savings to pay off the debts, you’d be £130 a year better off.

MarkyMarkD

Whilst it's bad practice for them to ASK you whether it's OK to transfer the money, and then do it anyway despite you not authorising it, the transfer itself is probably completely legit for the reasons given by other people.

I can't see why your husband needed to discuss the matter with you - why keep money in a savings account whilst exceeding your overdraft on your current account?

It's hard to see how the bank have done anything other than to act in your financial best interests here.