Do Banks have the right....

YorkshireBoy

Sillychuckie wrote: »

I don't see how my post count has anything to do with the matter, or how you think I am 'abusing' my relationship.

Ray was actually paying you a compliment Sillychuckie. :rolleyes:

jamesd

ejones999 wrote: »

I think if the 'permanent' overdraft was an agreed overdraft I would agree if OP was within his limit.
If not giving notice would be giving OP time to withdraw the funds completely!

Lloyds disagrees. From their defence in the bank charges case paragraph 16.3: "A new and specific contract comes into being between the customer and Lloyds TSB whereby, in return for Lloyds TSB considering the customer's request and/or (as the case may be) granting or declining the customer the overdraft or increased overdraft requested, the customer agrees to pay Lloyds TSB's usual charges for those services".

Per Lloyds TSB, the friend of the poster did not exceed his agreed limit but rather requested and was granted a new limit that was greater than the original limit.

It does not seem appropriate to take money from one account without notice to pay off part of an agreed overdraft, whether the originally agreed one or the one in the new contract.

According to their own terms and conditions "If we can reasonably do so without prejudicing our interests, including our regulatory position, we will give you at least 30 days notice before making the change" and "We only provide Unplanned Overdrafts for a limited period and we will write to tell you when you must repay one.".

They seem to have failed to treat their customer fairly by reducing the agreed higher overdraft without providing 30 days notice and then taking the amount from another account also without notice. Alternatively, if we ignore their claim in the OFT case, they seem not to have written to their customer to tell them when they must repay the unplanned overdraft, again failing to treat their customer fairly by acting in the manner described in their terms.

In this case Lloyds TSB seem to have failed to follow three different notification procedures that are specified in their terms. Customers should be able to rely on those for their financial planning unless there is specific prior evidence that the customer will not act properly.

jonesMUFCforever

jamesd said ''Per Lloyds TSB, the friend of the poster did not exceed his agreed limit but rather requested and was granted a new limit that was greater than the original limit.''

Unless I misread the original post it does not say that the overdraft is agreed or unauthorised on the account which is permanently o/d £1200 to £1600

Homework

It does say that the £600 transferred from his main account puts him back to his £1000 overdraft limit. If he was £1200-£1600 and his limit is £1000 I think he would have expected them to say or do something and must have had some correspondence saying he was over his limit.

If nothing else he must have known he was over his limit

jamesd

ejones999, the post suggested that the originally agreed limit was 1,000. Then according to the bank's argument in the OFT case, the bank made new agreements each time they allowed funds to be drawn up to the 1,600 level.

That is: the bank's argument in the OFT case is that this is not an unapproved overdraft. So let them act that way in practice, not just in arguments to a court.

Or alternatively, if (and only if) they are perjuring themselves via their legal representatives, that has its own appropriate penalty. I don't know if they are but the limited information here suggests that they are acting as if this customer has breached an agreement, not as if it's just another form of agreed overdraft. And that's contrary to the argument they are making in court.

RayWolfe

Sillychuckie wrote: »

They provide a service.. and I make use of it.
I don't see how my post count has anything to do with the matter, or how you think I am 'abusing' my relationship.

Read first, then reply. :rolleyes:
You must have been having a bad day ...

m.colak

Have you decided to go via the FOS as they subscribe to the banking code and article 14.1 states that they will attempt to contact you brother to inform him if they intend to carry out any action on the account. If they can't prove evidence to the contry then they are in breach of their own code.:D

Twinkly

Unfortunately, technically, banks do have the right:

Right Of Set Off

jamesd

Twinkly, two complications there: "The debt must be due and payable" and "We would not generally expect a firm to use ‘set off’ before giving the customer a reasonable opportunity to pay the debt".

In this case it seems that either the debt was not due and payable (the bank hadn't withdrawn the higher overdraft limit it had agreed to) or alternatively that it had withdrawn it but had not informed the customer and given them a reasonable opportunity to pay the debt.

jonesMUFCforever

What if the temporary increase in limit had been temporary (and advised of this either verbally or by letter) and had expired?