bank set off rules abused

[gwenlillian]

My previous bank (HSBC) settled a claim for penalty charges but used the set off rules to pay british gas and anglian water when i was needing the money for my mortgage - they say they were allowed to do that but i think i saw a case on the FOS website about this being wrong - does anyone know what i can do about it or if i am right about this please?

[des8]

Set off rules allow the bank to transfer credit in one account to pay off other debts held by them eg credit cards.
How the FOS regard "set off" is here: http://www.financial-ombudsman.org.u.../40_setoff.htm

Could you expand on your post so we can see exactly what HSBC did?
Did they transfer money from one of your accounts to another of your accounts to cover an overdraft caused by paying direct debits to BG and Anglia Water?,

[gwenlillian]

hi - so to add more info, instead of paying my claim against them to me, they sent me two cheques made out to the other companies, which were not paid by ddm through the bank or related in any way whatsoever, they were not part of their group or ownership, and i had no other account with debit balances in or cards. Therefore they deprived me of the right to make an arrangement with the two companies identified and use the money which was rightfully mine in a way i saw fit, to keep my creditors happy.

[des8]

So to get this clear;
HSBC had levied charges which you successfully reclaimed.
Your HSBC account had been closed, so they had to send you a cheque ? (Normally I would expect reclaimed money to be credited directly to an account but you refer to "my previous bank)
Instead of making a cheque payable to you, they sent you two cheques, one for BG, the other for Anglian Water.

Do you still have those cheques, or did you send them to the payees?

Were you in arrears with those two accounts, and if so how did HSBC know?

Do you have a letter (that you could post up) from HSBC setting out their reasoning?

Have you complained in writing to them? (Customer Care Team, HSBC Bank Plc, , PO Box 6125,,Coventry, , CV3 9GW)
If so and you are still dissatisfied there is always the Financial Ombudsman service

On the face of it I would agree that HSBC have acted incorrectly, but I'm trying to understand why and how.

[gwenlillian]

Hi - my account was still open. At the time the bank told me on the telephone that they were doing this with their customers. I objected. They insisted and I was not able to do anything about it so they issued the cheques to me only the basis that they were made out to other companies that I owed money too and made me choose which. It is my understanding now that HSBC did this to a lot of customers and their are identical cases on the FOS website which I have located. Now I see that there was no rule for doing this. I have been through my old files and found confirmation letters where I complained also. It was BG and my local authority rather than Anglian, as I first thought but that is irrelevant in many ways, it is the practice itself that I really object to. I have now made a formal complaint to HSBC. thanks.