Employer went into my account to 'reclaim' overpayment

GothicStirling

What they've done is treated the overpayment as a debt to the company, which is perfectly legal.

Say you had a credit card with Santander, they are legally allowed to access your account to pay the debt. Had you banked with Barclays, when working for Santander they couldn't have done this.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/40/40_setoff.htm

It's known as offsetting.

Naf

KiKi wrote: »

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

Wasn't supposed to sound argumentative, sorry.

getmore4less

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.

BUt not a lot of help if you still had debts that needed paying off and a deposit to save.

debt free and savings deposit are the goals, trying to keep a flawless record can cost more money.

There is no point in trying to get a clear credit record in 2 years if it will take another 6 to save up the deposit.

geting loans for cars is also silly unless that is self financing, reduces travel costs or allows you to get better paid work.

actaly defaulting getting interest frozen paying off and starting again can often be quicker and cheaper than trying to keep the record clean.

How much interest have you paid on paydays?

DVardysShadow

GothicStirling wrote: »

What they've done is treated the overpayment as a debt to the company, which is perfectly legal.

Say you had a credit card with Santander, they are legally allowed to access your account to pay the debt. Had you banked with Barclays, when working for Santander they couldn't have done this.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/40/40_setoff.htm

It's known as offsetting.

Offsetting is legal where the debt arises due to an account. But where it arises form any other cause, I would say that there needs to be some explicit justification for an offset. Look at the link. It is clear enough that this is only applied between accounts with the bank. In particular, I would think, based on the first case study, an offset between salary and bank account is an 'unusual or onerous term'.

Having said that, this suggests to me that the financial ombudsman is an avenue to pursue.

Naf

getmore4less wrote: »

There is no point in trying to get a clear credit record in 2 years if it will take another 6 to save up the deposit.

getmore4less wrote: »

actually defaulting getting interest frozen paying off and starting again can often be quicker and cheaper than trying to keep the record clean.

Very good points. I might just have to tell them where they can stick the payment plan they suggest, make an offer I can afford and leave them to default it if they choose (but still hope not). I've already got charges waived and suspended anyway.

getmore4less wrote: »

getting loans for cars is also silly unless that is self financing, reduces travel costs or allows you to get better paid work.

It will allow me better paid work, but with the family, and wanting a house move that'll likely put us in a worse transport position, its something I could really do with. Although, I'm only talking about something in the £1-2k region; so its big enough for the family and in reasonable condition.

getmore4less wrote: »

How much interest have you paid on paydays?

Far too much :-s
Since we first took one around a year ago it's probably been a few hundred pounds. But I've always kept on top of them, and have no intention of going back. I'm starting saving with the local Credit Union so hopefully 1: I'll be able to use savings in future, not loans; and 2. I might be able to get the odd £1-200 from them instead if needs must.

Mistral001

Naf wrote: »

. 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).
.

Look's like theft to me as because someone is owed money that cannot be used as justification for taking it from you without your knowledge. But supposing that they have set up some system whereby it is considered legal, then you should not be out of pocket because of their mistake. Make a note of how much this has cost you and put it to them. If they do not respond, I would consider taking them to the small claims court. Perhaps the Citizens Advice would help.

Naf

Mistral001 wrote: »

Look's like theft to me as because someone is owed money that cannot be used as justification for taking it from you without your knowledge. But supposing that they have set up some system whereby it is considered legal, then you should not be out of pocket because of their mistake. Make a note of how much this has cost you and put it to them. If they do not respond, I would consider taking them to the small claims court. Perhaps the Citizens Advice would help.

Not just out of pocket; I shouldn't be disadvantaged in any way. Obviously it needs to be repaid, but it can't be done in any way that would have a detrimental effect on my credit file. I wasn't having trouble before (other than having a payday loan, but I was on top of it), why should I be now?

Uncertain

Mistral001 wrote: »

Look's like theft to me as because someone is owed money that cannot be used as justification for taking it from you without your knowledge. But supposing that they have set up some system whereby it is considered legal then you should not be out of pocket because of their mistake. Make a note of how much this has cost you and put it to them.

This is the crucial point.

If you are certain there is nothing in your employment terms and conditions that allow this then you need to confirm whether accounts of staff members have special provisions.

If both of these draw a blank then the normal banking rules apply. The bank has 8 weeks to investigate and correct any complaint and must compensate you for any losses their mistake has caused you. Like any legal claim you have a duty to minimise your losses as far as reasonably possible.

After 8 weeks (or sooner if bank issue a final response) you can take the matter to the FOS. If you don't like their verdict you can still go to the small claims court.

I doubt anybody on here will know the banking technicalities but somebody on the bank board might.

Naf

HR management has responded to a fairly lengthy e-mail I sent. Their only justification was that they're allowed under 'common law'. Definitely nothing in my employment terms, and I'm sure they'd have mentioned more if there amwas anything more. Looks like official complaint is my only option. Do I make that like a customer d'you reckon?

DVardysShadow

Naf wrote: »

HR management has responded to a fairly lengthy e-mail I sent. Their only justification was that they're allowed under 'common law'. Definitely nothing in my employment terms, and I'm sure they'd have mentioned more if there amwas anything more. Looks like official complaint is my only option. Do I make that like a customer d'you reckon?

Pursue the manner of the chargeback and specifically the lack of warning as an employment grievance. Pursue the abuse of the chargeback as a customer.