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

AndyM4c

Hi I am in receipt of state benefits being disabled and this week Bank of Scotland clobbered me with 3 lots of £39 which would have been in excess of my weekly benefits. To cut a long story short I was able to divert payment of the benefits before the bank could swallow them but I did find out something very interesting after speaking to the DWP apparently it is UNLAWFUL for the bank to make charges on an account where they know the sole source of income is state benefits. This is supported by the fact on all Income Support letters it says that "This is the minimum the LAW says you need to live on" or words to that effect. It is also supported by this snippet I got off the C.A.B. website:-

“The Banking Code stipulates that banks should exercise consideration when applying charges, especially if a client is in financial difficulty. The code states that ‘subscribers may consider agreeing with such customers appropriate concessions relating to charges and interest payable by the customer. This may mean suspending or reducing interest, default charges and annual fees where agreed repayments do not cover them’”

So I am going to claim from the bank all the charges I have incurred over the last few years based on this point not the fairness of the charges themselves. I will let you know how I get on.

As a final thought the DWP went from paying benefits by giro to the banking system because of thefts and fraud it would seem they went from worrying about thieves in baseball caps to thieves in suits.:mad:

Phoenixx73

ok last week i sent off another letter to Abby. (The one posted on the pervious page in red text) altho i did change some of the wording.

So far I have yet to have a response from the bank, but it is still early days.

I@m hoping that it will be resolved quickly but I aint holding my breath. This is like £1600 in fines (that does include the 8% interest)

will wait to see what they come back with, but i am assuming that they will eb unwilling to co-operate so I am kinda seeking advice on what my next step should be.

rjm2k1

AndyM4c wrote: »

but I did find out something very interesting after speaking to the DWP apparently it is UNLAWFUL for the bank to make charges on an account where they know the sole source of income is state benefits. This is supported by the fact on all Income Support letters it says that "This is the minimum the LAW says you need to live on" or words to that effect. It is also supported by this snippet I got off the C.A.B. website:-

But benefits are NOT your sole source of income, you are forgetting to include the extra money (loan) you are getting from your unathorised overdraft, it's no different than applying for a loan of any other kind and I have to assume that apart from being hit with high interest rates due to high risk there's nothing to stop someone on benefits doing that.

I suspect that if you ask different people at the DWP, you will get a different answer each time, until this is clarified in court.

I can't believe that anyone on benefits can really believe that they are different from anyone else as far as "charges" go, does this mean you wouldn't have to pay off a loan for a sports car because the government says you are getting the minimum needed to live on, yet doesn't state you have to be responsible with your money at the same time? Get what you can out of the banks for now before it's clarified, hopefully it will be stopped fairly soon, before the cost of this gets passed onto people who are better at managing their money (however little that may be).

For the record, I do agree that some of these accumulating charges are extremely unfair and need to be changed, possibly by declining the transaction which would make you go overdrawn (which would create it's own problems), I don't agree that just because someone is on benefits they should be treated differently to anyone else if they can't manage their money.

zena2105

rjm2k1 wrote: »

I can't believe that anyone on benefits can really believe that they are different from anyone else as far as "charges" go, does this mean you wouldn't have to pay off a loan for a sports car because the government says you are getting the minimum needed to live on, yet doesn't state you have to be responsible with your money at the same time? Get what you can out of the banks for now before it's clarified, hopefully it will be stopped fairly soon, before the cost of this gets passed onto people who are better at managing their money (however little that may be).

For the record, I do agree that some of these accumulating charges are extremely unfair and need to be changed, possibly by declining the transaction which would make you go overdrawn (which would create it's own problems), I don't agree that just because someone is on benefits they should be treated differently to anyone else if they can't manage their money.

From what I can gather, it is not stating that banks aren't allowed to Charge you penalties, for O/d, unpaid items, but saying that they can't take it out of any benefits money..

..so technically they could still charge, just with a bill through post....??? Which on benefit money you could agree to pay back, and would eliminate getting more charges, as they haven't taken it from your money....

Keame

I am in the que to claim back my charges(dependent on the court case by the OFT).
However I am claiming DLA, as my health problems don't allow me to work. I have a son who is Autistic.
My husband cares for all the family.
I am not a scrounger.Till my health failed I always was in full time employment:In fact I was in employment,full time, before I left school.
Growing up in a tourist area it was the norm to work holidays,before and after school.
I will now get to my querry(sorry).I went to my bank manager to ask for a buffer,not a overdraft.He sold me a loan.The repayments and the financial commitments of family on benefits resulted in charges.
I opened up a Post Office account to try and sort things but due to my debt to the bank we are sinking and dont have REAL money anymore.
I don't want sympathy.I would like some kind of answer.

asm1970

Hi All, I wonder if any of you can help me? I have written to Lloyds TSB on behalf of my Mum & Dad who are currently receiving Pension Benefits and they got to the stage of waiting for an offer before the Test Case was announced. I remember reading in Martins guide of reclaiming of a Act of those on benefits. Does this mean we can still go ahead with the claim as they are receiving benefits? Is there anything I can do now for them? Many Thanks

kalair

I looking from some advice from someone in the know.

I'm attempting to help my mum reclaim bank charges taken from her this year. She has been out of work since Jan 1st and Martin's info on Bank charges states that the law regarding banks taking charges from benefits is differently to the case currently with the high court.

As there isn't a template letter on the site for this sort of thing (I don't think...), I have attempted one myself. If people could comment on it, as to whether it is accurate and will do the job, it would be greatly appreciated.
Obiously, I've only posted the body of the letter and left out in confidential info:

Dear Sir or Madam,
<O:p></O:p>
Re. Account number: ###### #########</B>
<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com[IMG]http://forums.moneysavingexpert.com/ /><st1:date Month=[/IMG]<b><font face=" /><st1:date Month="1" Day="9" Year="2026"></st1:date><FONT face=Arial><FONT size=3><FONT face="Times New Roman">I am writing to request the repayment all the default charges that have been applied to my account since January 1<SUP>st</SUP> this year (2007). I am aware the bank will be awaiting the outcome of the High Court test case regarding unlawful bank charges, however since January 1<SUP>st</SUP> this year (2007) I have been unemployed and living solely on benefits. The <FONT color=black>Social Security Administration Act (1992) states that banks must not take charges from benefits as this money is needed for a person to live on. This documented law, unrelated to the Unlawful Bank charges Test Case currently being heard by the High Court

<FONT size=3><FONT face=Arial>So far this year I have incurred charges totaling £490.00 <O:p></O:p>
<FONT face=Arial><FONT size=3><FONT face="Times New Roman">I understand that the bank has imposed these charges because my account contained insufficient funds; however the charges have only worsened my financial situation and caused insufficient funds to be present for further bill payments. I respectfully request that these charges are refunded to my account as they contravene the above mentioned Act. <O:p></O:p>
<FONT face=Arial><O:p></O:p>
<FONT face=Arial><FONT size=3><FONT face="Times New Roman">Please find a full schedule of the charges with this document. <FONT color=red>[INCLUDE A LIST OF CHARGES AND BE SURE TO KEEP A COPY FOR YOURSELF]<O:p></O:p>
<FONT face="Times New Roman"><FONT color=red><FONT face=Arial><O:p></O:p>
<FONT face="Times New Roman"><FONT face=Arial>I look forward to a response from you soon.<O:p></O:p>
<O:p></O:p>
<FONT face=Arial><FONT face="Times New Roman">Yours faithfully,<O:p></O:p>


Thanks in advance to anyone who comments on this.

-Pete-

sadiejp

bump

bump

zena2105

seems ok to me. i sent a similar letters for friends, but the banks tend to ignore it, and they sent back standard OFT test case letter, although a weeks or so later they did send HARDSHIP case letter, asking for means forms to be filled in and returned.

I have written to Martin Lewis and asked if he can clarify this matter...so we may find out soon how it works....;)


this is what i sent:

I have been receiving Incapacity benefit since 2000 and am currently receiving approximately £125.75 per week this is what the government deems I am able to live on, to cover the cost of rent, bills, food and clothing, I have no other source of income.<o></o>
<o></o>
Whilst I have held my account with you, I have been charged and had levied from my account on numerous occasions fees of usually £28 for being overdrawn; this took about a quarter of my weekly income. This eventually left me down in money, a sum I couldn’t afford to repay, leading to more fines the next month, and so it continues, snowballing. Now I am currently £405.31 overdrawn. At the time I did contact you explaining my situation and asking for assistance but it was denied.

<o></o>
I have recently discovered there is a Law, called the Social Security Administration Act 1992, which says that banks must not levy charges from benefits as this money is needed for a person to live on. <o></o>
“Social Security Administration Act 1992
Miscellaneous
Certain benefit to be inalienable **

187- Subject to the provisions of this Act, every assignment of, or charge on-
(a)benefit as defined in section 122 of the Contributions and Benefits Act;
(b)any income-related benefit; or
(c)child benefit,
and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors”

<o></o>
I realise that you are likely to quote back to me that I agreed to this in my Term and Conditions, but you tell me if you, or any other bank would allow a customer to become a member without agreeing to these.

<o></o>
This has caused me a lot of financial hardship, of which I see no way out, so I therefore ask that you return all charges/fees levied from my account in the past 6 years, that were wrongfully taken in accordance with the law. Also note that I would like this matter dealt with in a timely matter, as it has no relevance to the current OFT Test Case.

<o></o>
If I do not receive a satisfactory response with an acceptable time, I will have no choice but to forward this matter to Tony Herbert, at the Citizen’s Advice Bureau and/or the Financial Ombudsman.<o></o>

mouthscradle

Apologies if this has been mentioned elsewhere, I 've had a look but I can't find it..

I'm about to start reclaiming charges from Lloyds TSB for my motherinlaw, she is a single mother also bringing up her 2 year old grandchild and is reliant on benefits, she's always in financial difficulty and is charged on a regular basis.

I was about to send off the standard Data Protection Act request for the list of charges but have now seen this topic. What I want to know is, is there a template letter or anything that I should use first to notify the bank that she is in financial hardship and/or in receipt of benefits? Or do I just follow the normal reclaiming route?

Thanks for any help