Barclays overdraft issues - quite long, sorry!

CHTWORKER

Hi Guys

I am currently a support worker and one part of my job is sorting out clients debt and money issues.

I have a current client who had an authorised overdraft of £300.00. However, when I checked yesterday, his overdraft is now at -£841.00 which is obviously unauthorised.

I phoned the bank who confirmed that they have temporarily increased his overdraft to £842 to stop the charges and told him he needs to pay £20.00 per fortnight. Unfortunately, they have only agreed to do this until 21/08/07 and as they set this up on approx 02/07/07 they have basically only given him 6 weeks (in which he will have paid off the grand total £60.00).

After that, they will put it back down to £300.00 and they also expect him to increase his fortnightly payments as in their view, £20.00 is an unacceptable level! I will call them back and try to advocate on his behalf, but it's like banging your head against a brick wall.

Couple of questions:

1. How can the bank allow a person (he has learning disabilities, but I guess the bank don't know that) to actually go almost £550 overdrawn on top of his authorised overdraft when he only ever draws out cash from the machine or over the counter (i though it was impossible if you only draw cash).

2. Is there any way I can actually get them to agree to lower payment plan and also freezing any extra chrages.

My main problem is that he has been on Incapacity benefit for at least the last year and only earning about £120.00 per fornight, out of which he has utilities and food to pay, as well as small amounts to rent and council tax (the rest is covered by HB and CTB).

I have requested that the bank keep his overdraft at £842 authorised so that we can continue to pay it off at a reasonable and affordable rate without incurring extra charges, but they will not do this. They cannot offer him a loan or anything else which means that we are stuck.

I have pursueded him to open a post office account so that all future benefits can be paid in so that the overdraft does not swallow all his money, but really feel like we are fighting a losing battle with Barclays.

Any suggestions (and apologies for the long post!)

dancingfairy

Hi. Firstly opening a new bank account so they don't take his money is the right thing to do to start with.

Find out how this debt was accrued- is it actually his? has someone stolen it from him (fraud?- has he had his card stolen or anything like that?). If it is his then:
I would write them a letter explaining (with his permission of course) that your client has learning difficulties and find out how the situation has arisen. I also would draw up a budget for this gentleman showing how much he has coming in and going out and send this to Barclays and show that given his income that £20 is a reasonable repayment amount.

Lucy1982_2

I agree with Dancing Fairy, this seems like the most logical approach. At the end of the day what can they do. Take him to court where they will rule in his favour. If he doesn't have the money then there is nothing they can do about it.

But good luck and let us know how you get on.

quade

I came out of work through stress in Feb this year - I'm a teacher which speaks for itself! I'm in receipt of incapacity benefit of £244 per month. I have an authorised overdraft with the Coop Bank of £700 which is due to run out on 9th Sept. They informed of this this morning. They have said that though my account is being run extremely well (one of the best they've see they said!) that they will not be renewing my overdraft and that they want me to reduce the one I have now by £40 per month. Is this reasonable? I live with my partner who transfers money into my account every month to cover the loan I have with the bank etc.

They have said that there is something wrong with my credit report also which I have checked myself this afternoon. I could not see anything wrong and spoke to an advisor at Experian who said they couldn't see a problem either. I told the bank that this was the case and they said they then said were refusing the overdraft because I'm only in receipt of Incapacity benefit ie this is all that's going into my account evey month. As I've explained, my partner also transfers money over too.

This couldn't be anything to do with the fact I'm claiming bank charges could it? I would have thoguht that if I'm conducting my account so well, they would not want to turn that on its head by wanting £40 a month off me!

Thanks for any advice
Quade

msmicawber

Hi,

I would also recommend that you look at this thread, since the bank shouldn't be taking his benefit to pay charges since his benefit is for his living expenses only.
http://forums.moneysavingexpert.com/showthread.html?t=269424&highlight=bank+taking+benefit