Unsecured debt - Barclays helped themselves

robin.uk

Sadly my brother passed away a few months ago and I was named as Executor in his will. He lived in rented accommodation and had few possessions except for a car on (manufacturer) finance. He was a Barclays customer and had a current account, two ISAs and a Barclaycard. In order to be able to speak to Barclays to sort out his affairs and Probate, the bank insisted that I sign a form giving them authority to discuss his affairs. 

Well to cut a long story short, I have gone through all the calculations and submitted the Probate application. However, I have just received a statement from Barclays (no covering letter) showing that they have closed his current account and savings accounts and used the money to pay off his Barclaycard. My understanding of debt upon someone's death is that there is a strict order in which debts are to be paid under UK law. 

1. Secured Creditors
2. Funeral Expenses
3. Testamentary Expenses
4. Preferred Debts
5. Unsecured Creditors
6. Interest due on unsecured loans
7. Deferred Debts.

There were outstanding amounts in the first three categories, all of which should be paid BEFORE Barclays is entitled to any money to pay off my late brother's Barclaycard bill which is effectively an unsecured loan. As it happens, the amounts owing in the first three categories already exceeded what my brother had in his current a/c and savings meaning there wouldn't have been any money left to pay his Barclaycard. However without any warning or discussion, Barclays helped themselves to money which (under law?) they were not entitled. Turns out that on the Bereavement Closure form they have you sign there is some small print which includes the following: "Authorisation is given to Barclays to close any Barclays account(s) of the deceased (including any bond/ISA account(s)" also "Use any of the money in the Deceased's account to pay off any balances owed to the Barclays group".

My assumption when signing the form as Executor was that Barclays would at the very least observe Probate rules and allow debts of a higher priority to be paid before then claiming their pound of flesh. Barclays seem to think differently and that they can ignore the rules and just take what they want. Needless to say I have written to the bank three times without reply and have telephoned them numerous times succeeding only in listening to their entire collection of Oh-Hold music and never once getting through to a person. 

Surely the bank has acted unlawfully? Surely they can't flaunt the law by adding a clause which unilaterally promotes any unsecured debt they are owed to the top of the pile, before even the funeral expenses?  Sorry if this is a long rambling rant but I find Barclay's practices of taking advantage of people during a bereavement quite disgusting.

Malthusian

My understanding of debt upon someone's death is that there is a strict order in which debts are to be paid under UK law.

There is, but the right of a creditor to net the money owed by the debtor against any money owed in the other direction supercedes it.

Barclays have acted entirely correctly.

With the exception of not replying to your letters to tell you what I just told you, which is shoddy customer service. (If a bank isn't replying to your letters you should initiate the formal complaint process rather than trying the same thing and expecting a different result.)