Banks off setting

Debtfree_wannabe_2

Can anyone advise on the rules in respect of bank off setting from one account to another to recover debts? In short, I have opened a Lloyds account, but have debt with the Halifax. Can Lloyd's take money from this account to off set the debt owed to the Halifax?

TIA

MallyGirl

yes they can - you need accounts from totally separate organisations if you don't want this happening

Debtfree_wannabe_2

Oh that's strange - I've just spoken to Luke at StepChange who have advised that the rules have changed and as long as they operate under separate company names (i.e., Lloyds and Halifax) they can't offset.

MallyGirl

He is probably more up to date than me - it didn't used to be like that. I wouldn't take the risk personally

National_Debtline

Hi DFW


It's unlikely to happen here and I certainly can't recall it happening in my recent memory, but I do advise callers to our service to bank somewhere totally unconnected to their debts, just to err on the side of caution. Even if a bank has undertaken not to offset money, it can still happen in error - which is no consolation if you are left unable to pay a household bill as a result.


Dennis
@natdebtline

Debtfree_wannabe_2

Hi

For anyone that might be interested, StepChange have advised that banks cannot offset debt from one account to another. For example, if you have debt with Halifax but now bank with lloyds, you shouldn't be affected by rights of offset. While these banks are under the same banking group, a rule has been put in place to prevent internal offsetting against debts like this.

That said, the advice above is good advice if you don't want any risks and have alternative banking options. I think I'll take the chance.

sourcrates

Debtfree_wannabe wrote: »

That said, the advice above is good advice if you don't want any risks and have alternative banking options. I think I'll take the chance.

Thing is, Banks don't always play by the rules, when you are in debt, you need to make yourself bombproof.

Put it like this, you go down the corner shop, you always get the newbie, who can't "do" lottery tickets, yes, banks have similar staff problems, not everyone is always up to speed on the latest rules, sure you might get some of the money back, if they were to take it, but why subject yourself to the hassle ?

Your really should not take the chance, despite what stepchange tell you.

Westminster

Why is it worth taking any kind of chance that you will get offset??

What is so very very special about Halifax that you can't possibly consider using an unrelated bank?

With luck you will be fine - but Stepchange certainly are not going to reimburse you at some point in the future if Halifax do dip into your account.

Is it worth it given how easy it is to switch accounts these days?