Banks allowed to do this?

benny1679

iv just been to my bank and discovered they have taken £1000 off my overdraft limit, leaving me £700 over the new limit they have set, also i have had my DLA and tax credits swallowed up by the new changes leaving me and my family nothing to buy food or pay rent with. Can they take benefit money?

silvercar

They haven't taken benefit money they have withdrawn your overdraft facility. You need to contact your bank and find out why.

benny1679

Iv spoken to them, apparently £2000 was permanent, the rest temp, i wasn't aware of this, they wont reinstate this as last month i went over my £3000 limit, just. the money from dwp has been paid into my account but the outstanding overdraft has swallowed it up and after talking to them they wont give it back.

pupsicola

My bank does an annual review on overdrafts. I recieve a letter from the each April telling me what they are happy for me to have as my overdraft limit for the next 12 months. It seems to be assessed by them seeing how well I have stuck to it over the year.
I've never had an overdraft just suddenly reduced with no notice though.

Broken_hearted

Move banks and arrange to pay off the OD as it could happen again.

Mum-2-Be

Before I became ill I worked for a bank (the one with the red logo) and constantly got calls from people saying we couldnt take benefit money.

YES THEY CAN.

The funds are in the account, if you owe the bank money (charges O/D etc) they are within the rights to take from the funds.Also if you are with the Red Logo bank they can withdraw your O/D at any time as they see fit without prior warning, its in the T's and C's.

The only way to stop this is having a basic bank account which offers no lending facilities.

Sorry mate x

[Deleted User]

open a Post Office basic account to have your benefits paid into,a bank can withdraw part or all of an O/D facility as and when they chose
you can protect benefits in a "normal"bank account but you have to inform the bank that you want to do this

dave030445

Make sure this months benefits dont go into that account as they will be taken aswell as you are still £700 over your new limit.

nottslass_2

Mum-2-Be wrote: »

Before I became ill I worked for a bank (the one with the red logo) and constantly got calls from people saying we couldnt take benefit money.

YES THEY CAN.

The funds are in the account, if you owe the bank money (charges O/D etc) they are within the rights to take from the funds.Also if you are with the Red Logo bank they can withdraw your O/D at any time as they see fit without prior warning, its in the T's and C's.

The only way to stop this is having a basic bank account which offers no lending facilities.

Sorry mate x

Actually they can't.

Its called RIGHT OF APPROPRIATION.

Anyone intrested may find this link usefull
www.kettering.gov.uk/site/scripts/documents_info.php?..

ETA Can someone please insert the above link as I cant seem to get it to work ? TA

Sixer

The previous poster is correct. Banks can't take income-based benefits to pay off overdrafts. However, they do need to be informed first about a first right of appropriation:

http://www.kirklees.gov.uk/answers/benefits/overdraft.shtml

dmg24

nottslass wrote: »

Actually they can't.

Its called RIGHT OF APPROPRIATION.

Anyone intrested may find this link usefull
www.kettering.gov.uk/site/scripts/documents_info.php?..

ETA Can someone please insert the above link as I cant seem to get it to work ? TA

The right of appropriation needs to be invoked before money enters the account. Furthermore, the bank can refuse such a request (although I have never seen an example where they have).

There is some confusion regarding the legislation in which the RoA is granted, as people take the word charge to mean any charge on the account. Strictly speaking, it means a legal charge, which is entirely different.