Money transferred from savings account to current account without authorisation.

[judgedread]

I have a Halifax current account with a �300 overdraft. This amount is 'overdue'.

I also have a Halifax savings account and have just noticed that an 'unauthorised' transfer had taken place. Or what appeared to be. On contacting the Halifax I was informed that it was they that had taken the money from my savings account and 'transferred' it, and thus paying off my current account overdraft.

OK, it was wrong of me not to take care of my overdraft when it was due, but 'unforeseen' circumstances took priority.

My question is..Can a bank/building society just take/transfer money from one account to another without informing me or asking for my authorisation first?

Thanks in advance.

[El D]

You would need to look at the small print of the respective account contracts. My gut feeling is that if they have done it then they can. If they couldn't it would be breaking so many banking regulations they would be taken to the cleaners.

[Gef]

Never, ever, trust the Halifax / Bank of Scot;land. Last November approx �2500 disappeared out of my account. Eventually they admitted that they had taken it from the wrong acount (they thought it was another customer's) and paid for any charges I had had. However, they never apologised. They are too busy making adverts, using our money, to line the pockets of Howard!!!!

[Sammy Snake]

The answer is yes, they can.  Most banks have something in the small print which says that they can offset a debt on one account with any credit balance on another (in the same name at the same bank, obviously).

The moral of the story seems to be to keep your overdraft in one place and your savings in another bank completely!

[kempie]

Why on earth do you have a savings account and still use an overdraft facility on your current account... you are giving the bank money for no good reason.  If anything the Halifax saved you money by transferring the funds to cover the overdraft.

[stevie21]

I agree with what's already been said - why even use an overdraft if you have savings?
The bank are completely entitled to pay off your debt with the money in the savings and you should be grateful that they have done so rather than let you stew and accumulate bank charges.

[Hgrove]

I thought I had read a newspaper article a long time ago that said the opposite from what other respondents have written vid. that the bank is "not" allowed to do this.  Plus, when the "big guys" put things in small print so they can "get" the "little guys" like us, they can't always get away with it.  There is something called protection against unfair terms in contracts etc etc. which is designed to stop bank (big companies) imposing unfair terms on individuals like us.  Banks would love to say: this is the a/c, take it or leave it, you'll find all banks impose terms like these that protect us.  So, whilst it is a good idea to keep savings with a different institution from your current a/c, I suggest you contact a law centre.  After all, you were probably receiving some interest on your savings and they have removed this opportunity from you.

[Miss Zippy]

Are you sure you didn�t subscribe to some kind of �offset� service, where a bank will offset one account (i.e. one in debit) with another (one in credit)?  Was your overdraft authorised or unauthorised? Perhaps there is some small print that says they can do this is the case of an unauthorised overdraft. Generally speaking though, I�m inclined to agree with the points made by Hgrove.  Unless you�ve specifically asked for an �offset� service, then you should be left to manage your money as you see fit.

[kempie]

Hgrove - How is reclaiming a debt from another account in credit 'unfair'; and the interest on the savings would be significantly lower than the interest on the overdraft (whether authorised or not) so I cannot see the sense in advocating that somebody increase their debt.

When I opened my accounts many years ago I believe it was standard practice for banks to operate this 'transfer' procedure and I can see no good reason for it not to be still in force.

[Hgrove]

Kempie, for a bank to help themselves in this way is, to my mind, the same as suggesting that where someone owes you money, it is alright for you to insert your hand into their pocket or burgle their house in order to take it back.  It is an unfair term in the sense that the bank is imposing it on the consumer.  The consumer has no choice in this matter because the bank has all the financial muscle and the consumer has none.  It is possible that the account holder has other funds held elsewhere, which he intends to use to repay the overdraft, and may not appreciate the bank pre-empting his actions in this way.

[Hgrove]

Judgeread, the following link may interest you.  It is to an article in the Guardian.  It mentions a group of volunteers which is dedicated to fighting unfair bank charges:

http://www.guardian.co.uk/guardian_jobs_and_money/story/ 0,,1405937,00.html

[kempie]

The consumer has no choice in this matter...

Of course you have a choice; don't put your money in a bank.

Also I can't get past the fact that you think it is OK to be in debt and not pay it back (the original question states that payment was overdue).  If you applied that logic to a loan secured on your property see how long it would take for you to become homeless.

[Hgrove]

Kempie, my obligation to pay back a debt does not imply the bank has a right to help itself.  As I explained, where someone owes you money, you are not allowed to help yourself.  You have to take them to Court and follow all the procedures.  It is called the Rule of Law.  Even with a loan secured on my property, if I am in arrears, the lender has to go to Court.  They cannot come in, knock down the door and kick me out.  Laws are there for the protection of both creditors and debtors.  On a separate note, it is not realistic in this day and age to suggest that you have a choice of not keeping your money in a bank.  Life would be, unfortunately, difficult without a bank account.  P.S. You are quite mistaken in your statement that I believe it is alright to be in debt and not pay it back.  But banks have to play by the rules like everybody else.  They are not above the law.

[Hgrove]

Judgedread, the link I posted does not work, but if you go to the Guardian website, click on Search Archive, you can find the article by inputting some of these details:

Title: Can Bob fix it? For Laura, he can

An unorthodox method to ensure a bank repaid excessive charges has paid off

Author: Richard Colbey (barrister)
Date: Saturday February 5, 2005

[kempie]

Hgrove - I think both our analogies are straying far beyond the issue (burglary, repossession etc.) and we do not know the terms & conditions applicable to judgedread's accounts but I think these points are pertinent:

banks play by the rules; it's called the Banking Code.  It is voluntary but complaints can be made to BBA, FSA and FOS.

the Banking Code permits overdrafts to be repayed on demand.

reclaiming a debt is not a 'bank charge', unfair or otherwise.

non-repayment of debt may result in referal to Credit Reference Agencies, adversely affecting credit rating.

banks do not 'impose' t&c on customers; customers sign agreements.

why an argument attacking something which benefits the customer financially?

and if I misrepresented your feelings about debt repayment, which I thought was implicit in the statement 'it is a good idea to keep savings with a different institution from your current a/c', I sincerely apologise.

I can find faults with many banking practices (charging for the use of ATMs and overlong cheque clearing times to name but two) but I just cannot see why this 'transfer' is improper.

[Hgrove]

Judgedread, all I wish to add is that I have found an article on the Guardian's consumer column which may be relevant to you.  As the link does not seem to work, you may wish to find the article as follows: go to www.guardian.co.uk , click on archive search (a box on the top), then use some of the following as search terms:  

The Guardian's consumer champion fights your corner

Anna Tims
Wednesday October 3, 2001
The Guardian

Would you credit it?

[stevie21]

This talk of big guys and little guys is silly - if you don't like the bank's terms then go elsewhere. If you sign a contract and are bound by it then stick to it and don't moan about it. If you don't like it, just don't agree to it in the first place.

All it boils down to is that someone has signed an agreement and been held to it. No rules broken.

[BenDToy]

The following is a quote from the Halifax Bank Account Conditions "If any money is overdue for payment on any other account you or (if your account is in joint names) any of you have with us, we may, unless regulations do not allow us to do so, take the money you owe us out of your account. We can do this without giving you notice". I think that is pretty clear don't you?