Halifax and Lloyds account set off

starM

Hi,

My sister had a LLoyds account 6+ years ago which was defaulted. The default has disappeared from her credit report.

She has opened up a Lloyds and Halifax account afew months ago but has not used it just in case they decide to keep the money and offset it against her old account.

She will not be using Lloyds account for this reason. Can she use her Halifax account - she is interested in the reward payment. Can Lloyds offset credit balance from Halifax to Lloyds?

Thanks

grumbler

MSE: Setting Off Rules

diamonds

grumbler wrote: »

MSE: Setting Off Rules

Needs updating with legislation, just like the Consumer Protection stands. Good to know there is some MSE guidance as I never knew of it.

20aday

Given your sister has had previously financial difficulties with Lloyds TSB in the past I'm surprised they allowed her to open an account again.

Many years ago I got into a mess with my money and ended up on an Arrangement to Pay with HSBC; when I saw their switching incentive recently they declined me and I imagine it's because of that.

Granted the default is now longer showing on your sister's file(s) and they can't be that bothered if they opened an account for her again.

starM

diamonds wrote: »

Needs updating with legislation, just like the Consumer Protection stands. Good to know there is some MSE guidance as I never knew of it.

Diamond,

What legislations?

Do you think its ok for her to use the Halifax account?

diamonds

starM wrote: »

Diamond,

What legislations?

Do you think its ok for her to use the Halifax account?

Use neither they both are part of Lloyds Banking Group, as is Bank Of Scotland and others http://www.lloydsbankinggroup.com/our-brands/


Setting off - It is 6 years from last contact from either party on the debt, not 6 years from the month of default date on the credit file.


Only in England and Wales though - Limitation Act 1980 http://www.legislation.gov.uk/ukpga/1980/58

PeacefulWaters

I worked within LBG on a contract basis in 2011. Right of set off fell under my remit. I state the date as things may have changed since then.

The way most of their T&Cs were worded was that funds could be set off from accounts in any part of the group.

The way their legal department guidance was worded was that they could only set off within the same brand. So Halifax to Lloyds (or Lloyds TSB as it was then) simply didn't happen.

While I became aware of an incorrectly administered shift from a BOS savings account to a Halifax debt (and ensured it was reversed in the customer's favour) I never came across LBG applying right of set off across any of their other brands in the same way.

They were keen to implement regulatory changes properly around giving customers notice of their intention to apply ROSO and leave customers with appropriate sums in their accounts to cover specific priority bills.

So, to answer the question. LBG will not apply right of set off from a Halifax account to a Lloyds account.

That said, there are numerous non-LBG providers out there. Halifax could choose to close your account and return your funds to you based on a previously unprofitable LBG account relationship.

Why take that risk?

Westie983

OP yes the offset rule runs to all accounts held in the LBG group so there is a risk of money held in Lloyds/Halifax/BOS can be used to fulfill a defaulted account.

More likely to be seen in same LBG accounts though, so savings account used to return a bank account back into credit both held with Halifax or Lloyds.