Bank Charges, Child Benefit and SMP

dgwebster

My partner is currently on statuatory maternity pay and child benefit only, but Lloyds TSB have taken Over £400 in the last three months (usually because their charges put her over the overdraft limit each month)

Can they legally take this benefit payment she is receiving and refuse to refund it under the hiatus on bank charge reclaiming?

If they stopped the charges, there would be no problem, but the bank is only caring about stealing more money from her.

TEDDYRUKSPIN

Has your partner tried opening another account somewhere else and cancelling this account?

Answer, they are legally obliged to take anything out of your account. The £400 seems to be excessive! Maybe she should pop in and explain to a decent branch manager. Most of the time they can refund the charges there and then. But sometimes not.

I also suggest she looks at cancelling some direct debits. Reasoning being is that these are the things that result inthe charges. I think tsb charge around £35?

dgwebster

All direct debits are now out of my account to avoid any from there.

The TSB now charge £20 for a returned direct debit, but more than often the DD is returned because you dont have that same £20. So it puts you over drawn.

You then get into the world of unplanned overdraft fees which are:

£15 a month
£10 a day (max 10 days and up to £100 over)
£20 a day (max 10 days, over £100 over)
Plus interest.

And thats per calendar month.

So one month it all went betty boggle, they charged a total £285 in charges.

So the following month, the SMP is spent a wekk later, £285 is taken off the account and it puts it £285 over drawn.

So the next month they charge £215.

might want to jump to the side, the snow ball is rolling.

I have however just discovered the little niche that as we are in Scotland and it is Lloyds TSB Scotland ltd that she is with, we can still press for the charges to be refunded straight away.

I have been with the TSB for 20 years. Well they aren't getting another year out of me. Nor the rest of my family, we are all walking from them over this.

now, just to convince alot of other people too.

dgwebster

bump.

so does anyone actually know with regards to it being her benefits that are being swallowed up?

krisskross

dgwebster wrote: »

bump.

so does anyone actually know with regards to it being her benefits that are being swallowed up?

Makes no difference to the banks. It is just income into the account from whatever source.

nmoon83

Hi there im a project worker who works for a RSL (registered social landlord) and i am currently giving out advice to our residents to do with financial help.

i noted that you are on benefits, well im very intrigued because the last person who said the banks dont care where the money has come from maybe wrong...

as stated in Martins article about the OFT Bank charges
(http://www.moneysavingexpert.com/reclaim/oft-bank-charges)
if u look at the question right at the bottom "what else can i do if im living on benefits?" this looks like it could answer your problem and would probably help me a great deal with people living in our RSL residences as alot of my clients are on benefits.

Martin says it could be in breach of the Social Security Administration Act 1992 so it maybe found wrong for them to take away benefits which are actually required for living expenses.
I am currently trying to scour the internet for more information and template letters on this as it could drastically help alot of our residents and in particular your case too.

So this thread is definatly not closed yet there is hope!!

exil

Well, I'm afraid in this case Martin is 100% wrong. The Act just prevents banks (or anyone else) intercepting benefits and therefore preventing them being paid to the recipient (something which doesn't apply to wages or salaries, which can be "attached"). Once the money reaches your account, it's just "money".

Think about it. Do you really think that everyone on a benefit (including Child Benefit which includes a lot of people who could hardly be described as hard up) is legally not obliged to pay bank charges, mortgage interest, loan payments, etc?

dgwebster

i think then that my partners strength of claim will be the hardship. My wages barely cover most bills but we rely on her payments for food electricand so forth

Twinkly

I would argue that in taking money from payment meant for a child they are in gross abuse of their position. The child does not operate the account and is not responsible for the charge. The adult has no automatic right to spend it on whatever they want for themselves and it should never be taken to pay an adults debt.

Income meant for a child should be protected as bullet-proof in law and no bank allowed to intepret that law as they see fit. The bank should be restricted to taking only an amount equal to the governments personal allowance for an adult (£45) in any case.

It is to be considered that bank charges are the only method were a debt can be taken forcibly and immediately from a low income family with no consideration of income, family responsibilty and outgoings. Any debt collector would rightly be prosecuted for forcibly entering your home without warning and walking out with your purse. They MUST take you to court if you can not pay because you are on a low income and even then a judge will consider all income and outgoings before issuing payment arrangement or attachment of earnings.

It is outrageous that banks are allowed to bypass this simple justice for the lower paid and should be stopped immediately.

dgwebster even if you can not find any laws to back up your case argue it the best you can, present every questionable point relative to what they are doing and take it all the way to the Ombudsman. I wish you the best of luck in your fight and hope it isnt spoiling your first few months with your baby. You will never get this time back again and really, hard as it is financially, be glad you all have each other

Twinkly

exil wrote: »

Well, I'm afraid in this case Martin is 100% wrong.

Do you have an legal evidence to back your statement or did you just 'think about it ' ? Try and be a bit more helpful eh.

Tozer

Twinkly wrote: »

Do you have an legal evidence to back your statement or did you just 'think about it ' ? Try and be a bit more helpful eh.

Yes.

Law is in Social Security Administration Act 1992:

187.—(1) Subject to the provisions of this Act, every assignment of or charge on—

• (a) benefit as defined in section 122 of the Contributions and Benefits Act;

• (b) any income-related benefit; or

• (c) child benefit,

and every agreement to assign or charge such benefit shall be void

Charges on assets and income and assignments refer to it BEFORE it gets to the bank account (e.g. a charging order made on earnings / attachment of earnings orders). Once the money is in the account, it is no longer treated to be benefits.