Right of Offset

[Amethyst]

http://www.financial-ombudsman.org.u.../40_setoff.htm

If you sucessful get a refund of charges the bank has the right to pay them into the account that they were withdrawn from. They don't however have the right to pay them into attached loan, card, mortgage accounts unless there is a valid default on the account. If the bank say they will offset your refund against any other products check the information below and the article attached above.


Certain conditions must be met before the firm can exercise its right of ‘set off’.

The account from which the firm transfers funds must be held by the customer who owes the firm money.

The account from which the firm transfers the money – and the account from which the money would otherwise have come – must both be held with the same firm.

The account from which the firm transfers funds – and the account from which the money would otherwise have come – must both be held in the same capacity by the customer concerned. So, for example, if Mrs C holds a savings account in her capacity as treasurer of a local society, the firm cannot take money from that account to pay Mrs C’s personal credit card bill that she normally pays from the current account she holds in a personal capacity.

The debt must be due and payable. For example, if a customer misses making a loan payment, then (at least until it calls in the loan) the firm can take only the missed payment – not the balance of the loan. (ie you have a loan for £3000 and you are £500 in arrears - then the bank has the right to offset the £500 not the full loan amount)