What can we do if we are on benefits (merged)

Virgo_Girl

I'm not a lawyer but as someone who used to be responsible for some Statutory Instruments (government legislation) in the past and had to look into something similar for another government department,I can say that you are correct.

The act does not say that bank charges (i.e. overdraft/bounced payments) can't be applied to people claiming benefits.

Instead it stops lenders using your benefits as 'security' for a loan or insisting the benefits are paid to them directly instead of the benefit claimant.

Regards
Sunil

So what this ^^ guy is saying is that the banks ARE legally allowed to take charge from benefits then?............. great

Virgo_Girl

Hello deary65,

Thank you for taking the time to reply to me and for the excellent advice too!

I shall endeavour to go through with badgering the bank for the charges back with the letter you suggest and amended because i am in England.. but i'm not sure how successful i will be as i've just found this on another site...

I'm not a lawyer but as someone who used to be responsible for some Statutory Instruments (government legislation) in the past and had to look into something similar for another government department,I can say that you are correct.

The act does not say that bank charges (i.e. overdraft/bounced payments) can't be applied to people claiming benefits.

Instead it stops lenders using your benefits as 'security' for a loan or insisting the benefits are paid to them directly instead of the benefit claimant.

Regards
Sunil

I shall still try anyway, it can't hurt to try!

rjm2k1

I don't think that it can be taken for certain either way, it's something which may end up being tested in court again.

MonkeyMad

I would interpret that instrument as meaning that any benefit payments may not be used as direct payment for any services (the assignation) and may not be used as collateral for debt (the charge). You would need to have the definition of charge in this case - it could have meaning similar to charge against property when sold or not.

I have sympathy with people who see their money swallowed by excessive charges, but caution is needed that this is an end to charges altogether. The crux it really about what was the intention of the Act? It must be to ensure that claimants are not unsrupulously or otherwise denied their benefits by giving them to someone else.

The banks arguement would be that you are not being denied the benefit since any amount used to offset (legal) bank charges is just the repayment of a debt. As far as they see it, they apply charges to an account in overdraft. The fact that you have some money coming into the account that is from the State would not seem entirely relevant.

If you have £100 overdraft and have some charges of £10 (say) you owe the bank £110. If you then pay benefit in of £110 you owe the bank nothing and they haven't stolen any benefit.

If you owe the electricity board £110 you would be expected to pay them this amount from your £110 benefit. Doesn't seem to different.

An alternative is to have benefits paid into an account that does not allow overdrafts and hence no charges?

johnhope

I get Disbility Living Allowance which apparently nobody should be able to touch and income support. I would like tro know which benefit the bank took my money from.

borgbaiter

Virgo_Girl wrote: »

Hello deary65,

Thank you for taking the time to reply to me and for the excellent advice too!

I shall endeavour to go through with badgering the bank for the charges back with the letter you suggest and amended because i am in England.. but i'm not sure how successful i will be as i've just found this on another site...



I shall still try anyway, it can't hurt to try!

isnt an overdraft by its very nature a loan? id carry on and not worry about that quote. certainly not in the spirit of the law if they do prevent you from recieving benefits your legally entitled to to enrich there bulging profit lines even further.

rjm2k1

MonkeyMad wrote: »

It must be to ensure that claimants are not unsrupulously or otherwise denied their benefits by giving them to someone else.

Yes, I think this is the interpretation, there used to be issues with people giving their giro book to someone else (eg loan shark) and never seeing the money, I think it's this kind of thing that they are preventing. Preventing bank charges when someone goes overdrawn is like preventing speeding fines etc etc.

taelia

I have to say a big thank you to this site. I have been trying to claim back my bank charges first from the Woolwich and now again through Barclays as the Woolwich completely ignored. I received a letter today telling me that they would no longer look at my claim until the OFT test case was done. I knew this would happen as I had read the statement put out about this court case. There was also a little gem in the Q&A section that has helped my case go forward and carry on being dealt with.

I am on benefits as I'm a single mum of two very young children. I read through the statement and Q&A and found that it mentioned the social security administration act 1992. I phoned my bank earlier today and told them that I will be claiming my charges back through that way and not the unfair bank charges route. They have since apologised and put back a couple of charges in my account. I have informed them that I will be taking them to court for charges and they have now phoned and said hopefully this can be solved out of court. I will keep you posted as to what will happen next. But they are certainly paying attention to me now that I have chosen to take them to court for this action instead of unfair bank charges.

I hope if there is anyone in my position they will take this course of action as it seems to get good results. Good luck to everyone who takes this route

Elise1309

Hi,

I've a vague recollection of reading somewhere that the banks can't levy penalty charges while you are out of work ie can't make you use your benefits to pay fines.-

Is this correct or have I imagined it?!

Thanks, E.

GarethR

Elise1309 wrote: »

Hi,

I've a vague recollection of reading somewhere that the banks can't levy penalty charges while you are out of work ie can't make you use your benefits to pay fines.-

Is this correct or have I imagined it?!

Thanks, E.

Elise, click on the link below & scroll down to 'Other Issues & Questions'

http://www.moneysavingexpert.com/reclaim/oft-bank-charges

Also have a read through this, seems a positive thread

http://forums.moneysavingexpert.com/showthread.html?t=269424&highlight=charges+while+on+benefits

:beer: