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Banks leaving many high and dry by taking money from their accounts

March 19, 2009 by admin  
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A number of banks have been accused of taking money from consumers’ accounts by stealth, with officials stating that this practice is leaving many people high and dry, with no cash left with which to make essential payments such as pay bills, rent, and mortgage.

It is claimed that some banks simply transfer money from customers’ current accounts without informing them to make repayments on debts such as credit cards, and – particularly in the current financial climate – customers are unable to recoup the money to make payments on other essential services.

Officials from the Citizen’s Advice Bureau have now said that the practice must be stopped, as it is creating huge problems for many people. It is claimed that in some cases benefits that have been paid into customers’ accounts are then transferred out by the banks and used to make payments on credit cards or loans, leaving the consumer without means to pay for whatever the benefit payment was intended for.

Banks are able to conduct this practice under the Right of Set Off, and the CAB has said that in the past two years there has been an increase of 25 percent in the number of cases where this practice has been used. The British Banker’s Association said that whilst it was sorry for the inconvenience and problems caused for consumers banks did take their responsibilities under the Banking Code very seriously.

If customers are struggling to make repayments on loans and credit cards on time it is advisable to contact the lender and let them know so that the money is less likely to just be taken from the account, which could then create even more problems for the accountholder.

Tags: Citizen Advice Bureau, Business Finance, british bankers association, advice bureau, banks, climate

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