Overdrawn bank accounts

  • This topic has 14 replies, 1 voice, and was last updated 14 years ago by Anonymous.
Currently, there are 0 users and 1 guest visiting this topic.
Viewing 15 posts - 1 through 15 (of 15 total)
  • Author
    Posts
  • #33959
    NeilC
    Participant

    I have a vague memory that housing benefit paid into an over-drawn account can prevented from being used, by a bank, to repay the over-draft. Is the correct or have I dreamt it? If so, under what powers is this allowed?

    Cheers.

    #94641
    Mikeb2
    Participant

    If the account is overdrawn I’m not sure what else the bank would/could do. 😯

    #94642
    Anonymous
    Guest
    #94643
    NeilC
    Participant

    Probably but the link only takes me back to the main menu. What’s the name of the thread?

    Cheers.

    #94644
    Anonymous
    Guest

    BACs to right person but the wrong account….

    #94645
    NeilC
    Participant

    Thanks. That helps. I don’t suppose any one knows the legislation which allows us to do this?

    #94646
    Anonymous
    Guest

    Think its in the appropriation of funds order, which I’m told says HB payment can only be used to pay rent, not to offset an overdraft – it should be somewhere on the FSA website (I think), but can’t find it (well what do you expect at this time on a Friday?)

    If anyone can find it, could you please supply the link?

    Thanks 😆

    #94647
    lewys01
    Participant

    Correct me if I’m wrong anyone but a contact in the banking world has told me that a claimant can request a payment to be made into the overdrawn account and be allowed to be drawn out to forward to the landlord. This is called the “first right of appropriation”. The claimant is only allowed to request this once and any subsequent request will possibly mean the claimant will be asked to close the account. However, I’m reliably informed that climants with overdrawn accounts may open a basic bank account to accomodate LHA payments at the discretion of the branch managers..

    #94648
    Anonymous
    Guest

    http://www.opsi.gov.uk/ACTS/acts1992/ukpga_19920005_en_20#pt15-pb6-l1g187

    Social Security Act 1992, 187 – Certain benefits to be inalienable.

    We are considering drafting a blank template for customers to complete and give to their banks, should the situation arise.

    It is not only benefit that can be assigned, but any funds. Ideally, the bank should be given 7 days notice; if they ignore the request, then it means a complaint to the ombudsman.

    #94649
    lewys01
    Participant

    …….but only one request can be made???

    Is it like giving the claimant a last chance to pay their landlord before they consider what other options are available to them??

    #94650
    Anonymous
    Guest

    I’ve not seen anything to suggest only one request can be made. From what I’ve seen, they can make the request for all kinds of things. Making the request every time the situation arises would be advisable to safeguard the bank honouring the arrangement each time. Presumably, you could even phrase the letter in such a way as to say that payments will be made on [i:4e47d8e428]these[/i:4e47d8e428] dates, and withdrawn on the same dates, in order to pay rent.

    The bank can refuse, but all that happens then is a complaint is made to the ombudsman. There’s nothing to suggest the refusal can be upheld, or that such refusal is anything more than a) ignorance of the rule, or b) cussedness.

    #94651
    peterdelamothe
    Keymaster

    Thanks to those who raised this; I have done a bit of research and included it in a briefing note. I do not think there is any limit on the application ….it can be used more than once. The banks are not exactly keen to encourage it though (not unreasonably).

    #94652
    Julian Hobson
    Participant

    Sorry if I’m picking up on this late.

    This is useful (or is it) ?

    http://boards.thisismoney.co.uk/tim/threadnonInd.jsp?forum=87&thread=74102

    I think from this and other searches the term is:

    “first right of appropriation”

    Perhaps someone could access the reclaimunfaircharges website to see what it states in their Benefit templates/tools forum. I can’t from here.

    This is also useful.

    http://www.adviceguide.org.uk/c_banks_and_building_societies.pdf

    Looks like it can be done more than once BUT it has to be done in advance of each deposit.

    #48404
    Debbie_Perry
    Participant

    This was mentioned in the hbinfo benefits briefing Dec 07-issue 13 and, as previously stated, the customer exercises the ‘right of first appropriation’. The briefing also provides a sample letter that customers could send/deliver to their bank. Hope this helps.

    #94653
    Anonymous
    Guest

    Resurecting an old thread here – does anyone have a copy of the sample letter I could have 🙂

Viewing 15 posts - 1 through 15 (of 15 total)
  • You must be logged in to reply to this topic.