PLEASE HELP! Bank paid up but are offsetting it on Loan, and I cannot withdraw it!!

PrincessJR

Hi,

I really need to know if this is legal?

Natwest have paid up £1317.00 into my account with them. (I am actually now banking with Halifax). I went into my branch to withdraw the money to find that they willnot release it as I have arrears on my loan with them. The reason I have arrears is that I have a Debt Management Plan in place, through which I pay reduced payments. THEY ACCEPTED THIS!!

They have now told me to write to their debt department to complain??

Its been over 2 months now since this tarted and I feel so frustrated!!

My money is in the account, but the longer it stays there the more charges are being applied and the balance is going down!!!

Its now at £1160 from £1317.

HELP! can I claim these curreent charges too and will I ever get my hands on my money!!??
xxxx

Twinkly

PrincessJR wrote: »

Hi,

I really need to know if this is legal?

Natwest have paid up £1317.00 into my account with them. (I am actually now banking with Halifax). I went into my branch to withdraw the money to find that they willnot release it as I have arrears on my loan with them. The reason I have arrears is that I have a Debt Management Plan in place, through which I pay reduced payments. THEY ACCEPTED THIS!!

They have now told me to write to their debt department to complain??

Its been over 2 months now since this tarted and I feel so frustrated!!

My money is in the account, but the longer it stays there the more charges are being applied and the balance is going down!!!

Its now at £1160 from £1317.

HELP! can I claim these curreent charges too and will I ever get my hands on my money!!??
xxxx

This kind of thing goes on all the time and it annoys me intensely to see it happening. The bank took money that wasnt theirs to take in the first place and it should be refunded to you directly. They could not help themselves to the contents of your purse to put to this agreement, they have accepted lower payments. The loan is a seperate contractual agreement that is paid as agreed so there is no breach affecting its running. I completely fail to see justification for what they are doing, legally or otherwise.

All this can be put in writing to them and I would certainly demand they state the legal precedent (not a bland rendition of their terms and conditions) that states that they can do this. If there is no legal precedent I would demand payment by cheque of the full amount you accepted in settlement, not what is left over now. If there is legal precedent I would then seek legal advice on their full reply stating it.

The settlement money should be where it is legally required to be which may not be where you want it to be but I dont know of any other way personally to challenge them.

This is what I would do. You may not choose to do this and I would advise you to wait on a second or third opinion from anyone who can state the legality of what they have done.

Good luck with this I will watch for updates with interest.

Tootsie_Roll

ROSO is a common law to everyone and doesn't need to be stated in the bank's t's & c's. Effectively anyone holding money on behalf of someone else can apply that money to 'set off' any money that is owed by the same person even if it is an entirley unrelated account/debt.

Very common practise and entirely legal, I am just surprised they haven't taken the whole lot in one go.

Sorry.

Twinkly

Tootsie_Roll wrote: »

ROSO is a common law to everyone and doesn't need to be stated in the bank's t's & c's. Effectively anyone holding money on behalf of someone else can apply that money to 'set off' any money that is owed by the same person even if it is an entirley unrelated account/debt.

Very common practise and entirely legal, I am just surprised they haven't taken the whole lot in one go.

Sorry.

Having googled on 'right to set off' I have come up with this which may be of interest to the OP:

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

A section of which states: The debt must be due and payable. For example, if a customer misses making a loan payment, then (at least until it calls in the loan) the firm can take only the missed payment – not the balance of the loan.

Given that the loan is currently under an agreed payment schedule in amendment to its original terms and conditions it logically follows that they do not have the right under ROSO to take the money in full. Therefore the settlement should be paid direct to the claimant, less any actual monies owed (which there isnt under the reduced arrangement) and not witheld in this manner.

The debt may be recalled as a retaliatory measure and it is then up to the claimant to make further arrangement to clear the debt.

This definitely bears further investigation and certainly challenge. I urge the OP to read the article I have linked as she may be able to complain to the Financial Ombudsman after exhausting the banks customer complaints procedure.

Tootsie_Roll

Twinkly wrote: »

Given that the loan is currently under an agreed payment schedule in amendment to its original terms and conditions it logically follows that they do not have the right under ROSO to take the money in full. Therefore the settlement should be paid direct to the claimant, less any actual monies owed (which there isnt under the reduced arrangement) and not witheld in this manner.

The lender will not have agreed the reduced repayment schedule as an amendment to it's original t's & c's - the original t's & c's have already been broken meaning the account is already in default even if it hasn't actually had a default notice yet.

I make no comment on whether the money should be returned to the OP or not.

Twinkly

Tootsie_Roll wrote: »

The lender will not have agreed the reduced repayment schedule as an amendment to it's original t's & c's - the original t's & c's have already been broken meaning the account is already in default even if it hasn't actually had a default notice yet.

I make no comment on whether the money should be returned to the OP or not.

Perhaps 'amendment' was the wrong word and perhaps 'addition' would be better. The Office Of Fair Trading or the Banking Ombudsman are more likely to deal with the complaint right down to the minutest technicality and it is their consideration that counts.

I advise to take this route since it is what I would do in this situation. I feel there is grounds for complaint and the outcome of such a complaint would have obvious repercussions for all payments taken in this manner. It would further provide valuable help and information to those in the same or similair situations whatever the outcome.

Tootsie_Roll

Twinkly wrote: »

I advise to take this route since it is what I would do in this situation. I feel there is grounds for complaint and the outcome of such a complaint would have obvious repercussions for all payments taken in this manner. It would further provide valuable help and information to those in the same or similair situations whatever the outcome.

Well good luck to you but you are talking about trying to change a law that is centuries old.

Edinburghlass_2

PrincessJR wrote: »

Hi,

I really need to know if this is legal?

Natwest have paid up £1317.00 into my account with them. (I am actually now banking with Halifax). I went into my branch to withdraw the money to find that they willnot release it as I have arrears on my loan with them. The reason I have arrears is that I have a Debt Management Plan in place, through which I pay reduced payments. THEY ACCEPTED THIS!!

They have now told me to write to their debt department to complain??

Its been over 2 months now since this tarted and I feel so frustrated!!

My money is in the account, but the longer it stays there the more charges are being applied and the balance is going down!!!

Its now at £1160 from £1317.

HELP! can I claim these curreent charges too and will I ever get my hands on my money!!??
xxxx

Originally Posted by MSE Martin
The following is the view of the top lot at the CCCS

Martin

"The answer is not very clear I'm afraid because there are too many variables.

Not all lenders freeze interest, so there may be no impact. For those that do, it may affect their decision whether to continue the freeze, particularly if they have had to fork out a lot in charge refunds.

I'm not aware that any have very specific policies regarding how they will treat DMP clients who request refunds. I'm certainly not aware of any clients who have suffered as a result of reclaiming their charges.

If a bank overdraft is comprised almost entirely of charges that were then refunded, that would essentially wipe one of the debts out altogether and remove it from the plan.We would expect the client to use the money towards clearance of the debts, unfortunately, as we are not actively involved in the process (i.e. we don't do it for them) we don't know to what extent they are successful and how much they get - we're reliant on their honesty!)"

PrincessJR

Hi Guys,
Thanks so much for your responses.
In the first instance I have sent a letter (as advised by Natwest Customer Relations- hmm very helpful I might add...not!) complaining that it was never part of my agreement, when I accepted their reduced offer of settlement, and have requested that the matter be completed to my satifaction within 14 days or I will be filing with small claims court.
I have stuck to my side of the deal with reagrds to the DMP, they should stick to theirs. My loan is, as you say, completley seperate. if I paid my wages back into the account when I start working, they couldnt off-set that onto my loan so why should the reclaimed charges be any different, they're both MY MONEY!!
anyway, ill keep you all informed.
thanks again for the support, fingers crossed!!
xxxx

Twinkly

Tootsie_Roll wrote: »

Well good luck to you but you are talking about trying to change a law that is centuries old.

I did not state anything about changing this law. I concur it is centuries old but it can be challenged on a technicality as is shown in the article. Many laws are challenged on technicalities and many court cases won and lost on technicalities including our own dear bank charges.

In the article I posted I see a technicality that may provide grounds for the OP's complaint and if it is upheld that is for the FO to decide. As Edinburghlass's post quoting Martins post (thank you both) on these situations shows there are too many variables and no clear answers. It is up to the individual case, circumstances and validity of challenge of the applicable law.

I wish the OP the best of luck in dealing with this if she chooses to complain to the FO. At best she gets her money, at worst she doesnt. As the situation stands at present she has nothing to lose by attempting this action and a life lesson will be learned along the way regardless of the outcome.

Feux_Verts

Tootsie_Roll wrote: »

a law that is centuries old.

I think that's exactly the point, outdated and inappropriate.