Employer went into my account to 'reclaim' overpayment

Naf

Up until fairly recently I worked for Santander (believe me, they're no better on the inside). I had no clue what to expect as my final wage (not having kept track of my own holidays, plus there was a potential bonus I didn't know if I could expect or not), so when £808 went into my account at the time I would usually get paid, I took this as my final pay. (My usual monthly wage was around £940, clearly the amount I was paid had been calculated and wasn't just a normal salary run, so I don't think it unreasonable for me to assume this). I proceeded to use this to pay off a payday loan and buy groceries etc. Just a couple of days later, the £808 suddenly disappeared in a 'Salary Recall Process', leaving me £675 over my overdraft. I've phoned and had it explained that actually I wasn't due any final wage; something was added on my final payslip instead of being deducted so I appreciate that I am not due the funds, what I need to know is can they really do this?!
I contacted ACAS and they say that usually employers wouldn't be allowed; deductions can be made from future pay if they need to reclaim an overpayment, however to check my contract. I have received the most up to date terms of employment from them in the post, and I can't find any provision to delve into my private account (whether held with them or not) and steal from me (before you say anything, I know it's not theft really).
Unfortunately I am in no position to get the payday loan back, and have no savings to speak of (£20 lol). I have a parachute account which I have switched across to using, unfortunately the ineptitude of Tax Credits changed my Working Tax payment, but failed to change the Child Tax Credit which meant I had to contact collections and make a payment arrangement that there's no way I'll be able to keep to just so I could get my payment back and pay my rent.
Basically, the payday loan would have continued to show on my credit file (if it showed at all) as an account in good standing, but now my bank account is likely to start showing arrears. Whilst the history on there isn't rosy, all of the accounts I am using at present have been up to date for a couple of years now, and I don't see that their error should cause black marks against me.
I just want to know where I stand with what they have done, and what I can use against them to argue my case that they need to make a more manageable arrangement which will not have any effect on my credit file?

Sorry its a bit long, but I know you'll ask for all that background in the end anyway...

getmore4less

You need to talk to the bank about extending the OD because they have done this.

Even if it is in their employment contracts they really should have notified you about this error.

Ask for the detailed breakdown of the payments and overpayments, they may have made a mistake.

You should know what pay you are due and if not asked as part ofhte leaving process.

Never have you main banking with your employer.

Living on payday loans to keep a "good" credit record is utter madness.

why do you think you need a good credit record anyway?

Naf

getmore4less wrote: »

You need to talk to the bank about extending the OD because they have done this.

yeah, done this with Collections, but its a managed down overdraft, and no way I'll be able to make the repayments they demanded. I had to agree or I'd not have been able to get my Tax Credits back off them.

getmore4less wrote: »

Even if it is in their employment contracts they really should have notified you about this error.

Not in the contract; have looked. They are claiming they can reclaim it under "common law". I assume they're trying to extend the interpretation of making deductions from future pay.

getmore4less wrote: »

Ask for the detailed breakdown of the payments and overpayments, they may have made a mistake.

You should know what pay you are due and if not asked as part ofhte leaving process.

I've had this all fully explained, and I understand exactly what has been done wrong. I only had a vague idea what I could expect; as there was a query as to whether I'd be entitled to bonus, all I could dow as wait to see if I got it; and it seemed at the time like I must have.

getmore4less wrote: »

Never have you main banking with your employer.

Yeah, won't be making that mistake again.

getmore4less wrote: »

Living on payday loans to keep a "good" credit record is utter madness.

No, that's what I'm now going to use the Credit Union for, now I know about them. I was using the payday loans because I needed the money and had no other recourse.

getmore4less wrote: »

why do you think you need a good credit record anyway?

I would like to be able to get a car/mortgage sometime. Granted not for a while, but I was doing a great job keeping my accounts in order so once historical problems fell off (only about 2 years now) it'd all look fine.

Uncertain

You may be better posting this question on the banking forum.

Presumably this must be a direct debit? If so, strict rules apply to all banks that operate the scheme. Basically the bank must reclaim any payment that you tell them was incorrect and immediately credit you with the money. This leaves you to fight it out with the company that made the debit.

It may also be worth talking to the Financial Ombudsman Service.

Obviously if you do owe this money it will have to be paid at some point so this may make some of the above largely academic.

GothicStirling

Do you bank with Santander?

Sambucus_Nigra

GothicStirling wrote: »

Do you bank with Santander?

It's in his signature.....and in post no 3.

Naf

Uncertain wrote: »

You may be better posting this question on the banking forum.

Why: its to do with the legality of my employer just helping themselves to money that's in (or no longer in) my bank account.

Uncertain wrote: »

Presumably this must be a direct debit? If so, strict rules apply to all banks that operate the scheme. Basically the bank must reclaim any payment that you tell them was incorrect and immediately credit you with the money. This leaves you to fight it out with the company that made the debit.

Nope, not a direct debit. Nothing set up on the account. I suspect the only reason they were able is because they are both my employer and where I held my account.

GothicStirling wrote: »

Do you bank with Santander?

Not any more. Only opened it because I worked there; pay went in up to 3 days earlier if you hold your account there.

Uncertain wrote: »

It may also be worth talking to the Financial Ombudsman Service.

Already have; there's no special legislation allowing them to do this just because they're a bank. It's not a transaction as such like a DD would be.

Uncertain wrote: »

Obviously if you do owe this money it will have to be paid at some point so this may make some of the above largely academic.

Naturally. But they can't leave me disadvantaged because of their mistake. This is my point that they just want to wash their hands of it; not their problem. Whereas had they not made the error, I'd not have paid off the payday loan, but would have still shown all my accounts in good standing. So they need to set me back in a similar situation to before they messed up. i.e. paying no more than £60 per month on my debt, all accounts showing as fully up to date on my credit file and no bank charges.

Uncertain

Naf wrote: »

Why: its to do with the legality of my employer just helping themselves to money that's in (or no longer in) my bank account.

I say this because it is largely a banking matter. No other employer would physically be able to have done what you describe. Had they paid you too much and you were no longer an employee they would have to pursue the matter like any other debt.

People on the banking forum may know if banks are allowed to operate accounts held by employees in a different way - maybe they are I don't know. I know some banks insist that an employee has their main account with them but i don't know the details or any special terms that apply.

If no special conditions apply, the money has effectively been debited from your account without your authority and the bank will have to reimburse you just as they would any other customer.

DVardysShadow

Uncertain wrote: »

... People on the banking forum may know if banks are allowed to operate accounts held by employees in a different way - maybe they are I don't know. I know some banks insist that an employee has their main account with them but i don't know the details or any special terms that apply.

It will not be a matter of 'allowed'. It won't arise from statute, it would arise from the employment contract. And OP says it isn't in there.

MrsManda

I don't know if there's a difference in law regarding payment of salary etc... but if a person claims they've mistakenly sent money to the wrong account they can ask their bank to recall the payment. Could this be what happened here?
I think the receiver's bank is supposed to write to the person who received the payment to explain that the money will be sent back to the sender on X date but when something similar happened to me (not wages just a wrong payment) I didn't get the letter until after the money was recalled.

I know it's the wrong amount rather than wrong account but the employer may have done a recall of a Direct Credit which seems to be legal:

Can I Stop a Direct Credit?

Essentially you have to contact your bank to recall the payment. It's a good idea to call your bank as soon as you have identified that you have made a payment that is going to be credited to the wrong account. Your bank will advise you of the timescales involved.

http://www.ukpayments.org.uk/resources_publications/faqs/automated_payments/

KiKi

Naf wrote: »

Why: its to do with the legality of my employer just helping themselves to money that's in (or no longer in) my bank account.

Because people on the banking forum may have come across this before with regards to the behaviour of banks, and Santander in particular.

'Uncertain' suggested it in order to help you, and because you may get a better response there. If you don't want to, then don't, but you asked for help, so you were offered a suggestion.

KiKi