Deep concern of banks moving their customer’s money without permission
The BBC’s Moneybox Live program recently revealed a growing problem in Britain as Banks are transferring money from people’s bank accounts without their permission and in some cases leaving them unable to pay their mortgages.
The claim originally came from the charity Citizens Advice Bureau. They have faced a growing number of complaints that banks are taking money from people’s current accounts to cover credit card and loan debts.
Both the charity and the BBC are calling on banks to scrap the practice. However, the banking code as it stands allows them to transfer funds without permission.
In most cases, companies can only force someone to pay a debt by taking them to court. However, as the BBC discovered, the Right of Set Off allows banks to legally transfer cash to pay credit card or loan arrears without account holders’ permission.
The Citizens Advice Bureau says it has seen a 25% rise in the number of such cases in each of the past two years. Even considering the financial crisis these figures are astonishing.
In response, the British Bankers’ Association says the onus is on customers to talk to their banks if they are in difficulty. They have a point here, people burying their heads in the sand when confronted with bad financial news are only storing up more problems for the future.
However, that argument does not, in my opinion justify banks transferring money from people’s accounts without their permission.
The Citizens Advice Bureau says there have been specific examples of people having benefit payments removed from accounts, leaving them unable to meet “priority debts” like mortgages and council tax.
The British Bankers’ Association says cases where money has been removed “inappropriately” are regrettable but that banks take their responsibilities under the banking code seriously. I can’t help but suspect that in the current climate those responsibilities are becoming less of a priority. There is no excuse for banks moving their customer’s money without their permission, especially if it is simply to service their own bad debts.
