Question of the Week: Can merging banks take debt?

Former_MSE_Lee

Q. Now Santander owns Abbey, A&L and Bradford and Bingley, if you've debts with one bank and a current account with another, can they take money to repay the debts from the current account without asking. Paula, by email


Martin's A: The right of setting off means all banks can have the automatic right, to take money for unpaid debts (credit card, mortgage, overdraft or loan) from a current or savings account held with it without permission and without asking (see the setting off guide.

In the case of Santander, it can already move money between old Abbey and B&B savings accounts, and A&L too will be allowed from 28 August 2010. Anyone struggling financially must be wary and prepare by separating savings and debts.

With other groups, if a bank wants to extend its standard rights it should tell you in the T&Cs.


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Suzkin

Hi,

My mini cash ISA is with A&L, and I've their Premier Direct Acct.

I've used the £500 interest free overdraft on the Premier Direct Acct - could A&L take the £500 back at any time, from my ISA??!

Lokolo

Suzkin wrote: »

Hi,

My mini cash ISA is with A&L, and I've their Premier Direct Acct.

I've used the £500 interest free overdraft on the Premier Direct Acct - could A&L take the £500 back at any time, from my ISA??!

Yes they can.

However, banks only do this when they believe they might not get the money back!