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Bank charges when receiving benefits

Last post Sat, Aug 06 2011, 12:41 PM by TimmyTurbo. 10 replies.
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  •  Sat, Aug 06 2011, 12:41 PM

    Re: Bank charges when receiving benefits

    ACTUALLY THIS IS THE CASE !!!

    i went into my local halifax yesterday 5august 2011 , and asked back for £765 of un arranged overdraft fee's. even though i was £426 overdrawn ( i only had £100 overdraft ) within 1 hour hour they reluctantly gave me the money in cash !!

    PLEASE NOTE : this actually increased my overdraft but the interest was frozen , not al banks are going to do that as far as i know .

    hope this helps CHEERS Tim
    • Post Points: 5
  •  Mon, Sep 14 2009, 3:36 PM

    Re: Bank charges when receiving benefits

    I have read in various places that banks are not allowed to take bank charges from benefit payments. THIS IS NOT THE CASE.

    Once a benefit payment is credited to an account it merges with the existing account balance, whether this is overdrawn or in credit. If the account is overdrawn the bank are fully within their rights to offset the benefit payment against the overdraft and take any charges.

    Regarding Section 187 of the Social Security Act 1992:

    1. Section 187 provides that every assignment of or charge on benefit and every agreement to assign or charge such benefit shall be void. This section is designed to ensure that claimants do not give up or put at risk benefit designed to ensure a minimum standard of living for themselves and for their families.

    2. Section 187 does not prevent banks from making charges relating to the claimants bank accounts. Such charges imposed by banks would be outside the scope of Social Security legislation. One of the vices which section 187 was designed to catch was to protect claimants from pledging their order books to loan sharks to defray debts owed to third parties. It does not affect the ability of the banks to make charges pertaining to claimants account.

    However, under the terms set out in the Banking Code, banks are obliged to deal with all cases of financial difficulty sympathetically and positively. Customers who find themselves in difficulty should speak to their account provider about their needs in order to come to an arrangement to deal with their debt and safeguard their benefit payments.

    I hope this clarifies the situation.

    • Post Points: 20
  •  Tue, Aug 25 2009, 6:59 PM

    Re: Bank charges when receiving benefits

    excellent, well, I'll let you know how I get on tomorrow!

    and if he doesn't play ball, I'll ask to speak to his manager

    £38 is ridiculous, especially if they are calling it 'admin' charges, it was after all me that called them to discuss the debt they hadnt previously noted!

    Thank you, fingers crossed, really dont need this right now, so glad I came here to ask :)

    • Post Points: 20
  •  Tue, Aug 25 2009, 6:55 PM

    Re: Bank charges when receiving benefits

    It is still current law, even if it wasn't it's unlikely your bank manager would know the difference... by the sounds of it. !

    That act was formed to protect means tested payments intended for vulnerable people, from being consumed by unintended charges...benefit money was never intended for that purpose or as security, it is an award that is the minimum amount the law says you need to live on.

    They are breaching their code by depriving you of that amount awarded. !

    • Post Points: 50
  •  Tue, Aug 25 2009, 6:52 PM

    Re: Bank charges when receiving benefits

    conmankiller:

    Quote this act to the bank manager asking them to return the money, if not tell them you will lodge a formal complaint as they are also in breach of the banking code of practice.

    Social Security Administration Act 1992
    Miscellaneous
    Certain benefit to be inalienable **

    187- 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; and, on the bancrupcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors.

    ** inalienable = not to be forfeited.

    I saw this after a search, thank you!

    Does it still stand? Is it still the law? many thanks, sorry so many questions! lol

    • Post Points: 20
  •  Tue, Aug 25 2009, 6:50 PM

    Re: Bank charges when receiving benefits

    Hi again, thanks for moving the thread to its relevant place, I was a little lost to be honest!

    I asked the bank whilst discussing it over the phone and they said they would not remove the charge as they were not at fault, I asked to speak to the manager, he said he was the manager. He told me the charges would come out on 17th September as they give a few weeks to pay off the charge in advance. He was not interested in the fact that I could not afford this with my only income being benefits, I put to him that I had been told by the benefits agency lady that no money could be taken, he said it could and it would be. I hung up on him :/ !

    I've been left in an awful mess after my partner of 12 years walked out on me leaving me with an 11 year old son and a 6 month old girl. I am already paying £86 a month towards the electricity, and £50 towards gas (I thought he had been paying the bills) so another £38 in one month is too much, especially with new school uniform to buy etc.

    Sorry waffling on!

    I'll try the bank again tomorrow, I'll make sure they know am claiming hardship, although from the conversation this afternoon it was apparent he already knew that and wasnt going to budge :(

    many thanks for your help.

    • Post Points: 5
  •  Tue, Aug 25 2009, 6:46 PM

    Re: Bank charges when receiving benefits

    Quote this act to the bank manager asking them to return the money, if not tell them you will lodge a formal complaint as they are also in breach of the banking code of practice.

    Social Security Administration Act 1992
    Miscellaneous
    Certain benefit to be inalienable **

    187- 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; and, on the bancrupcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors.

    ** inalienable = not to be forfeited.

    • Post Points: 50
  •  Tue, Aug 25 2009, 6:16 PM

    Re: Bank charges when receiving benefits

    max2011:

    OK. I don't know about whether banks can take charges out of benefits money, however you should ask the bank to refund the "unfair" charge. For most people there is a hold on refunding unfair charges pending an ongoing court case but if you can claim hardship the bank should progress an immediate refund.

    Give your bank one more chance, if they say no register a complaint with the bank. Make sure they know you are claiming hardship. If they turn you down contact the Financial Ombudsman Service but make sure they are also aware you are claiming hardship.

    • Post Points: 20
  •  Tue, Aug 25 2009, 5:59 PM

    Re: Bank charges when receiving benefits

    last month it came out on the 27th, so I expected it to come out on the same day. However I spoke to the company it went to and they said that it was due on the 25th last month too, but they couldnt claim it then as it was a weekend. So they wont help me, the bank wont help me. All I have left is what I was told at the benefits agency, that the banks cannot take charges from benefits money...?

    Thanks for your reply.

    • Post Points: 20
  •  Tue, Aug 25 2009, 5:54 PM

    Re: Bank charges when receiving benefits

    max2011:

    Was the Direct Debit collected before the normal due date?

    • Post Points: 20
  •  Tue, Aug 25 2009, 5:51 PM

    Bank charges when receiving benefits

    Hello there,

    I have just been charged £38 for going £4 overdrawn after a direct debit came out of my account the day before I was expecting it to.

    I have been told by the benefits agency previously that the bank cannot do this as it is benefits. Is this true? The only things going into my account are Income Support, Child Benefit and Child Tax credit.

    The bank manager said he had no knowledge of this and would not be refunding my charges.

    Many thanks in advance for your opinions on this.

    Kind regards

    • Post Points: 35