Lloyds Bank's three month rule re 'inactive' accounts

birkee

There's something going on, that they don't make us aware of!

My Grandson left his Mothers home in Scotland 12 months ago, aged 17, to live with us (Grandparents) in Solihull. He had money in his Lloyds/TSB account at that time. Of course, with no income, he then didn't use the account. Now he's 18 (Last December), and qualifies for 'job seekers allowance', he needs an account again.
He went to the cashpoint for a tenner, and the machine kept his card.
Going to the bank, he was told that his account was £2-3 in debit, and was an 'under 18's account' anyway, and as a consequence, the account was closed.
BUT.....they refused to let him open a new account, as he had held an account which had been closed.
As a result of this, he still hasn't got an account, and is not getting his 'jobseekers allowance'.
(He needed documentation he hadn't got, to open a new account with another bank. Just sorted this week, and a new account with another bank this weekend we hope!)

The question is......how did his original account get into debit? How can they close an account without warning? (This probably due to his failure to notify change of address.)
Why refuse him a new account, when he has done nothing wrong?

With the interest rates these days, you're better off with money under the mattress anyway, except, that 'the system' FORCES you to have a bank account.
If you don't have an account,........ salaries, benefits, pensions, etc, can't be paid. If 'the system' forces a bank account on you, surely 'the system' should excercise some control over banking procedures in this area? Or create a special account for 'the system'!

iereboy

I think your grandson has a right to complain.

* He moved address and did not inform the bank. MAIN ISSUE
*He's no longer a child and wanted to use a child's account even though the bank wrote to him to tell him he needs it updated.
*He's gone overdrawn and does not know how.
*He's made no effort to contact his parents regarding if he has recieved any post especially from his bank or tried to have it redirected.
*He's being denied an account even though he's really tried hard to manage his account.

As for your questions.

Why refuse him an account when he has done nothing wrong?? I think you know the answer and its highly laughable when you add, he has done nothing wrong.
How did his account go overdrawn ? Read the bank statements if you can get it - it will tell him.
How can they close an account without warning? There was a series of letters sent warning him.


As for interest rates being so low, I don't think your grandson has to worry about this with job seekers allowance coming in.
People who don't take responsibility for their actions should live with the consequences of when things go wrong!
This should be a reality check for him. Learn, live and move on!

jonesMUFCforever

The account goes overdrawn because your grandson spent money he did not have - simples.
Small transactions do not always have to be authorised hence he spent money 'twice'.

TreeofLife

Let's hope that poster 13 & 14 never make a mistake or their children for that matter.
Why do forums have people who make unkind remarks:eek:

zppp

TreeofLife wrote: »

Let's hope that poster 13 & 14 never make a mistake or their children for that matter.
Why do forums have people who make unkind remarks:eek:

Cannot see what is so insulting about post 14 personally.

iereboy

TreeofLife wrote: »

Let's hope that poster 13 & 14 never make a mistake or their children for that matter.
Why do forums have people who make unkind remarks:eek:

Unkind or realistic?

They were meant to help.

I hope the grandson gets a bank account. I hope he uses mobile banking and internet banking to keep track of his spending. I hope his credit rating improves and he gets a job! But mostly I hope when he moves he lets his bank know straight away!

Hazzanet

@OP

Is the overdraft still in place?

Normally, a bank will only give an overdraft where it sees some kind of credit coming into the account each month. I would posit that the bank didn't 'see' that credit coming in (although it may be going into the other accounts you hold) and the overdraft was withdrawn, hence the DD being returned as there wasn't an overdraft in place any more.

I may be wrong though.

Bloomberg

Jenny05 wrote: »

Having wasted the morning on a series of extremely frustrating calls to Lloyds TSB, I’m just writing this by way of a warning to people who may not be aware of a rule regarding ‘inactivity’ on a bank account.

I would normally transfer money every month from my business account to my budget account (both with Lloyds) to pay all my usual household bills. However, in mid-November I actually deposited a larger sum of money into the budget account. Since then I have just been spending that money as usual without making my regular transfers as they were unnecessary.

The account remained in credit all this time – until yesterday when my normal mortgage payment went out by direct debit. This took me slightly overdrawn, but nowhere near my agreed overdraft limit.

As I check my accounts online daily, I noticed this morning that the direct debit to the mortgage company had been returned unpaid.

I’ve spent the best part of this morning trying to unravel this scenario. It transpires that – because I hadn’t put any further money into the account for three months and regardless of the fact that it remained in credit until yesterday and I have still not gone over my overdraft limit – the ‘system’ automatically rejects all payments until I make another deposit into the budget account. On top of that, I will be charged £10 for the returned item!

I was assured that the ‘three-month rule’ would have been mentioned in the terms and conditions section of documents relating to my account – I haven’t unearthed said documents yet.

I won’t go into detail about the somewhat tiresome exchanges I’ve had with Lloyds about this. I can understand that they need to protect themselves but a little flexibility surely wouldn’t go amiss with someone who has banked with them for over 30 years. I’ve just been landed with an unexpected charge – and the potential of a negative mark against my credit rating for defaulting on my mortgage – which I feel is unmerited.

This might be something which other people have covered before, so my apologies if it is! But be aware!

I am shocked by their lack of flexibility - a very interesting post.

jonesMUFCforever

TreeofLife wrote: »

Let's hope that poster 13 & 14 never make a mistake or their children for that matter.
Why do forums have people who make unkind remarks:eek:

It happened to my daughter - she paid it back!...........she now keeps a little notebook in her bag detailing every card spend - she knows exactly how much she has left so it won't happen again.

birkee

Some contributers seem to get exercise, jumping to conclusions, don't they? (13 & 14, particulary iereboy who's response made no sense at all. Irrational.)

Firstly, to his knowledge, my Grandson had about £30 left in his account the last time he used it, buying a rail ticket from Scotland.
Secondly, since leaving Scotland, his account was untouched, so going into the overdraft situation was not possible.
Thirdly, due to the hostility engendered between himself and his Mother, there is no question of her forwarding post to him. No statements, no warnings of account closures, absolutely nothing he was able to respond to.
Fourthly, he did not use the account during his time with us, he merely went to check it when the machine kept his card.

His only offense, failing to notify his change of address, but, as he wasn't using his account, he probably saw no reason to worry about it. Had he done so......what's the chance of them reissuing all the post sent to his old address since December 2009?

So, iereboy and jonesMUFCforever your 'arrogant, all knowing replies' did not help. Also iereboy, I was not talking about my Grandsons account with regard to interest on his JSA, but mine and everyone elses accounts.