Lloyds Tsb took my savings

gg2011

Can lloydstsb take money out of my savings?
Recently sold my Iphone and needed the money to get my through the month, so in my wisdom i deicided to transfer the money into my savings so nothing/nobody could get it until i needed it.....now its gone

Michael_Nottingham

Most companies have a right of set off if you have more than one account with them
So if you had savings and an overdue account with them then yes

Janie4Now

If a payment is due (even normal direct debits) and you have insufficient funds in your main account then the bank can transfer money between accounts. Seems fair enough to me and saves on bank charges.

gg2011

Thanks for that, suppose i should just face the fact that i should of paid it in the first place lol

Janie4Now

Really didn't mean to sound sanctimonious. I'm not. When they did it to me, I was livid at the time!

What I did was to set up a separate little post office account and used that in months when I knew I was desperate.....always tried to pay my bills but it meant I knew I would have money for food!

gg2011

Good idea. I will get on that today. Definatley worth doing!!! Really needed that money aswell. Thanks for your reply.

Janie4Now

Good luck with that. I would never advocate not paying debts but sometimes needs must!

Just be careful that things don't get out of control - everything needs to be paid sometime. If you're struggling, it really is worth seeking professional advice

chattychappy

Janie4Now wrote: »

Good luck with that. I would never advocate not paying debts but sometimes needs must!

Just be careful that things don't get out of control - everything needs to be paid sometime. If you're struggling, might be worth a visit to the Debt Free Wannabe section for some good advice

Yep precisely. Debts should be paid, but when there is insufficient funds to pay pay everything on time, the right of set-off is dubious IMHO because it effectively allows the bank to give itself priority over other creditors. No doubt they will say that without this right, they may not be inclined to advance credit in the first place.

I believe there are some guidelines governing set-off when people are struggling.

Anyway, as you say, a practical way of retaining control is to place any incoming funds with an organisation with whom you don't have debts/overdraft etc.

pqrdef

gg2011 wrote: »

Can lloydstsb take money out of my savings?
Recently sold my Iphone and needed the money to get my through the month

The Lending Code says they can't help themselves to money that you need to live on, regardless of any right of set-off. Make a formal complaint and pursue it.

fermi

pqrdef wrote: »

The Lending Code says they can't help themselves to money that you need to live on, regardless of any right of set-off. Make a formal complaint and pursue it.

http://www.lendingstandardsboard.org.uk/docs/lendingcode.pdf

Use of the right of set-off

195. Before set-off is used, a subscriber should contact the customer to inform them in clear and simple language the generic circumstances in which set-off would be used and when e.g. if the customer does not contact the subscriber and/or address the missed payment. This contact should be made at a time when the lender is actively considering or is likely to exercise set-off and not so far in advance of the event that the customer may no longer be aware that it may be undertaken. This information should be as prominent in written communications and telephone scripts as other information.

196. Before applying set-off a subscriber should take account of information that they have available to them to identify whether the customer may be or may be heading towards financial difficulties. In all cases where set-off is to be applied and the subscriber has established that the customer is in financial difficulties, the customer must be left with sufficient money to meet their reasonable day-to-day living expenses and priority debts, where these have been identified. There are a number of ways that subscribers can make this assessment. Where more than one payment has been missed, the assessment could include reviewing income and expenditure statements (if the subscriber has these), and/or account turnover and behaviour, and/or analysis of the type and frequency of credits to the account. Particular care is required where it can be identified that a customer’s balance is made up wholly or in part of state benefits.

197. If the customer does not respond to contact or is not co-operative and there is no evidence available to the subscriber that using set-off will cause or exacerbate the customer’s financial difficulties, then set-off may be exercised.

198. Set-off should normally only be used to make up the most recent missed payment. However if the subscriber has contacted the customer about missed payments, told the customer that set-off is an option, and used the information available to them to assess whether the customer will be able to meet reasonable living expenses and pay priority debts, it may be used to make up earlier missed payments. A subscriber may also take more than one missed payment where the customer is not cooperating with the subscriber, for example by not responding to repeated attempts to make contact.

199. At least on the first occasion after set-off has been used, a subscriber should contact the customer to advise them and the customer should be encouraged to take appropriate action in the future to avoid missed payments.

200. If it is evident from subsequent contact with the customer that they are in financial difficulty either as a result of the use of set-off or otherwise, appropriate action should be taken promptly to ensure that they are treated fairly, sympathetically and positively as required by the Code.

fermi

Also...

FOS - banking firms' right of set off

Setting Off Rules: DON'T bank where you’ve got debts