Bank account closed, overdraft handed to debt collector

ireneandgerry

My son tried to reclaim his bank charges but bank closed his account ,handed the overdraft to a debt collection agency, when he pushed them they sent letter saying they would repay him £995 but of that amount £445 would be held to pay collection agency,he refused pointing out that without the unfair charges he would have not have had an overdraft then all claims were put on hold,since this he has been constantly phoned by different collection agencies and his credit rating has suffered leading to him being unable to get a morgage. Any advise on how he can resolve this issue:(

natweststaffmember

ireneandgerry wrote: »

My son tried to reclaim his bank charges but bank closed his account ,handed the overdraft to a debt collection agency, when he pushed them they sent letter saying they would repay him £995 but of that amount £445 would be held to pay collection agency,he refused pointing out that without the unfair charges he would have not have had an overdraft then all claims were put on hold,since this he has been constantly phoned by different collection agencies and his credit rating has suffered leading to him being unable to get a morgage. Any advise on how he can resolve this issue:(

I have a few questions.
1) Why did he refuse the first offer?(apologies but I really think he should have thought a bit more before rejecting the offer).
2) How old was he when he was first charged?
3) Did he go as far as to start a court claim?

Premier_2

ireneandgerry wrote: »

My son tried to reclaim his bank charges but bank closed his account ,handed the overdraft to a debt collection agency, when he pushed them they sent letter saying they would repay him £995 but of that amount £445 would be held to pay collection agency,he refused pointing out that without the unfair charges he would have not have had an overdraft then all claims were put on hold,since this he has been constantly phoned by different collection agencies and his credit rating has suffered leading to him being unable to get a morgage. Any advise on how he can resolve this issue:(

Have a read of the latest article on reclaiming
http://www.moneysavingexpert.com/reclaim/bank-charges

You may like to note the suggestion:

... there are no guarantees - while in the early days of reclaiming banks never fought, and if you went all the way you got a full payout, that’s far less likely now – so if you are offered a settlement – think about taking it...

ireneandgerry

Answers to questions
1. He refused the first offer as had he not had these charges levied on his account he would not have been overdrawn therefore why pay money for something he did not feel he created
2 He was only 18 at the time when this started,then he lost his job so was unable to get out of the mess he found himself in.
3 He would have gone to court but everything was put on hold while this case went to court.
In hindsight maybe he should have accepted first offer but who was to know what the outcome would be,but this would still have affected his credit rating so he was in a no win situation.

Premier_2

If he was in financial hardship, then the matter shouldn't have been held up pending any SC decision.

But if he was in financial hardship, there was an onus on him to help himself.

I don't quite follow the argument of your point 1 above. The charges were presumably incurred as a result of spending, or attempting to spend, money he did not have in his account at the time. Otherwise the charges are for something entirely different to what is being mainly discussed on this forum.

natweststaffmember

I have to agree with Premier, and I think your son probably didn't look at the way the charges were incurred in the first place because if they had refunded the charges directly to him then he would still owe money rather than closing the account.
I am not sure if he will be able to take the hardship route because the account is no longer active and the only way to do so would be to take the bank to court(guide due shortly) but this route is not going to be easy because they are untested in court.
I think he can still ask the question to the bank on financial hardship but not to expect too much from them.

ireneandgerry

Thanks for your reply they were very interesting and I agree that some of this was my sons fault but everyone who has reclaimed charges are surely as guilty of this but not all banks closed accounts when people asked for a list of their charges and then passed the debt to a collection agency.
The amount they offered first was his charges minus his overdraft ,they wanted him to pay the collection agency fees( sorry didnt make this very clear). Of course he must repay any monies owed but what I wanted to know was if this had happened to anyone else and how to resolve it.

Premier_2

In the early days of reclaiming, banks did resort to closing accounts of those who started claiming against them ... or when they otherwise thought the relationship between bank & customer had broken down.

http://news.bbc.co.uk/1/hi/programmes/moneybox/6349877.stm

natweststaffmember

ireneandgerry wrote: »

Thanks for your reply they were very interesting and I agree that some of this was my sons fault but everyone who has reclaimed charges are surely as guilty of this but not all banks closed accounts when people asked for a list of their charges and then passed the debt to a collection agency.
The amount they offered first was his charges minus his overdraft ,they wanted him to pay the collection agency fees( sorry didnt make this very clear). Of course he must repay any monies owed but what I wanted to know was if this had happened to anyone else and how to resolve it.

No one is talking about blame, at least I'm not, but about the fact that your son had the opportunity to settle the claim and did not do it because he did not think about it in the right way. With regards to the collection agency fees, if he had come here i would have said they can whistle dixie on that since the account was in dispute and passed to the DCA in error.
I think you need to tell the DCA that the amount is still in dispute so you will pay them nothing and start again with the bank/