Cancelled overdraft

jentay

I agreed with Lloyds to cancel my current account which had an overdraft due to financial problems through hubby's illness and me being his carer. I was told it would take months to arrange but today my overdraft has been cancelled and I can't access hubby's sickness benefits. Can they do this without notice? They've taken lots of charges despite being told of our situation and the fact that we have a DMP with Stepchange in place.

stclair

Overdafts are repayable on demand so yes they can remove it without notice.

grumbler

stclair wrote: »

Overdafts are repayable on demand so yes they can remove it without notice.

Yes, but...

10.3
Overdrafts are always repayable on demand. This
means that we can ask you to repay all or part
of your overdraft (and any interest or charges)
at any time, even if we have agreed a period
for the overdraft with you. We can also reduce
your overdraft limit at any time. If we demand
repayment or reduce your limit, this will usually
be due to a change or anticipated change in your
personal circumstances. If we can reasonably do
so without prejudicing our interests, including
our regulatory position, we will give you at least
30 days’ notice before making the change.

That said, as the OP "agreed with Lloyds to cancel", this can be considered as a notice.

However, my understanding was that the question was about the closed account, not cancelled overdraft.

colsten

grumbler wrote: »

However, my understanding was that the question was about the closed account, not cancelled overdraft.

It's not really clear from the OP, as it is entitled "Cancelled overdraft" and then talks about "cancel my current account" and being unable access husband's benefit money.

I think the OP should be talking to Stepchange about the problems as Stepchange will have a much more complete picture of the situation than we have on this forum.

meer53

The OP should speak to Lloyds as they cannot prevent access to benefits payments.

grumbler

But they can close the account, cannot they?

colsten

meer53 wrote: »

The OP should speak to Lloyds as they cannot prevent access to benefits payments.

We have no idea what the balance of the account was before the benefits were paid in. If, for example, the benefits payment only cleared a previous overdraft and the overdraft has now been cancelled, there is no money to withdraw but it doesn't mean Lloyds is preventing access to benefits payments. But who knows what the balance was before and after- we certainly don't.

Nor do we really know which account the benefits were paid into. The OP would need to clarify lots of things before any of us could comment in a meaningful manner. I still think they should talk to Stepchange because it sounds as if there might be an immediate financial issue.

meer53

colsten wrote: »

We have no idea what the balance of the account was before the benefits were paid in. If, for example, the benefits payment only cleared a previous overdraft and the overdraft has now been cancelled, there is no money to withdraw but it doesn't mean Lloyds is preventing access to benefits payments. But who knows what the balance was before and after- we certainly don't.

Nor do we really know which account the benefits were paid into. The OP would need to clarify lots of things before any of us could comment in a meaningful manner. I still think they should talk to Stepchange because it sounds as if there might be an immediate financial issue.

The OP says they can't access benefits now the overdraft is cancelled. That says to me that they were paid into the account where the overdraft has been removed.

It doesn't matter what the balance was before the benefits were paid in, the bank has to allow the OP to withdraw those benefit payments, even if the account still remains in debit. I work for a bank and have experience in dealing with cases like the OP's.

My other advice would be to open another account for the benefits to be paid into but i would assume Stepchange would have also advised this when the DMP was set up. I get the impression the OP thought they had more time to sort this out before the overdraft was removed.

jonesMUFCforever

Sounds like the account is now in Collections - they would have sent more than one letter before this happens - most customers ignore them or deny ever receiving them.
Talk to them and they will let you cash the benefits (account holder only to deal with bank unless PoA or 3rd party mandate) provided a repayment plan can be put in place.
They do not have to accept the DMP if they don't want to.


!!! others have said it would be best to open a new account if you are not able to agree a repayment plan.