Bank problems, is it illegal?

Question

Hi, just wondered if anyone had any information regarding the following, someone I know quite well - their only income is benefits which are put straight into their bank account. However, the bank keeps charging them and they are losing almost half of their money, it spiralled as one charge meant they couldnt repay that and the item which bounced, bla bla bla, basically, i am sure i read somewhere that it is illegal for the banks to take benefit money, can anyone point me in the right direction as to where i can find this information, i have looked, to no avail. Many thanks

Sorry but an instant bank transfer is supposed to be instant, not 3 days! I know that it is not allowed as benefit money is classed by the government as the minimum amount of money you can live on therefor the bank is not allowed to leave you with none. I know it but cant find it again, only trying to help someone here.

OI thecatthatatethecream WHO THE HECK DO YOU THINK U ARE? OBVIOUSLY A **** STIRRER, MY FRIEND WOULD GET OFF HER **** IF SHE COULD BUT SOME IDIOTIC PERSON ON THIS PLANET RAN HER OVER AND SHE IS 85% PARALYSED, SO NO, NOT MUCH CHANCE IN HER GETTIN OFF HER BACKSIDE IS THERE! U IDIOT! I ASKED FOR ANSWERS ON WHETHER ANYONE COULD GIVE ME INFO ON THE BANKS, NOT FOR UR TOTALLY IDIOTIC, STUPID OPINION ON MY FRIEND, TELL U WHAT THO, GOOD LUCK TO YOUR FRIENDS, IF YOU HAVE ANY CAUSE WITH FRIENDS LIKE YOU THEY WONT NEED ANY ENEMIES WILL THEY! ASSWIPE!!!!!!!!

Answer 1

It's called bank robbery...... banks seem to have a right to rob anybody!

Answer 2

Probably not illegal - depends on the amount of the charges. If you look at the Which? website, they do a sample letter you can use to challenge bank charges if they are unreasonable. Also I would advise your friend to open a basic bank account at another bank or a Post Office card account to get thier benefit paid onto, and have no direct debits paid out of this so they can have more control over their moeny. Also get some free advice on money matters from a local CAB or the Consumer Credit Counselling Service.

Answer 3

If the bank has 7 days notice that the money is designated i.e.
On 25th June 06 a payment of ?? will be going in to my bank account from ??
I will draw out this money on the day it arrives in my account for the following:
£50 rent
£75 housekeeping
£25 car payment
Please do not remove any of this money for any other reason.
They are not allowed to take this money out then as you have already designated it.
Also in the UK you can claim your charges back - www.bellisscupham.co.uk will do it for you with no cash up front and 100% charges paid back or you can google consumer action group for help to do it yourself. I've had almost £6000 from three different banks for 6 years charges (including compound interest!)
Good Luck

Answer 4

For your information-

Normal transfers between different organisations are done through BACS, who operate on a 3 day cycle.

Same day electronic transfers, CHAPS, tend to cost around £25, but do ensure money is moved the same day.

You must always wait for payments into your account to clear before transferring or withdrawing the money, this usually involves waiting 3 - 5 days.

Banks exist to make money, they will charge for anything they can get away with, charges are usually applied automatically by computer, but be aware that you local bank manager may have the authority to waive the charges imposed on your account. So take time to talk to your bank, they may be able to waive the charges - it has worked for me a few times.

I have not heard anything about not taking benefit money, check with your local Citizens Advise Bureau, they are also helpful when it comes to managing debt.

This answer relates to practice in the UK

Answer 5

Go to moneysavingexpert.com - I copied the following text off their homepage:

"Bank charges: Reclaim them, they're unlawful, so you can get six years money back
Your bank owes your money. Thousands have claimed £1000s as charges for exceeding your overdrafts, or bounced direct debits and cheques are commonly believed to be unlawful. This is a step-by-step guide including template letters and calculators making bank busting easy."

Apparently a lot of people have had success in claiming back the fees/charges, especially people on benefit/low income.

Good luck! MSE is a great site, quite similar to this one in a lot of ways and a great source of consumer information, hope it helps.

Answer 6

Yes it is illegal, banks can only recoup their losses, not penalise.
Charges above ~£12 are genaraly considered illegaly high but any charge where the bank makes a profit is illegal.
For info on reclaiming charges try motley fool or the bbc website.

Answer 7

never heard of such a thing. Basically, the bank came up with the program to offer the benefits in the first place, and I'm sure they put in the rules somewhere that they could withdrawl them without notice.

Sorry. You're probably out of luck.

Answer 8

Most banks have SSI accounts for people who get benefits. Sounds like your friend needs to see if he/she has that kind of account. If not they need to ask if the bank has that program. If the bank is a large bank they may not. Many community banks will have.

Answer 9

your best bet is to contact the benefits agency directly, I'm sure you already have, but if that don't work, contact the banks own head office. If you can write to them they may give a refund, classed as unauthorised transaction.

Answer 10

to the bank, money in an account is money in an account - they don't care where it comes from. Guess they need to change banks and have their money depositted somewhere else, and learn how to manage money to start with.

Answer 11

call the ombudsman
they should be able to answer your query

another suggestion - ask them to open up a post office account that deals with benefit only