First Right of Appropriation...offsetting debt against benefits RBS

[enaid]

Re: First Right of Appropriation...offsetting debt against benefits RBS

Once again it looks like they are hiding something IMO.
Could they have dropped another major boo boo?

I can understand this, so why can't the banks?

Are you Overdrawn?

[natweststaffmember]

Re: First Right of Appropriation...offsetting debt against benefits RBS

Once again it looks like they are hiding something IMO.
Could they have dropped another major boo boo?

I can understand this, so why can't the banks?

Are you Overdrawn?

Just when you had me there, enaid and I thought that this was fantastic I read on......
http://www.corby.gov.uk/SupportingDo...ropriation.pdf

Tsk tsk

[enaid]

Re: First Right of Appropriation...offsetting debt against benefits RBS

Why you laff? lol
Anyway how come the Benefits people can not state that when this benefit is deposited the person in receipt will automatically use their Right of Appropriation and therefore this money is to be used soley for the purpose it was deposited.
After all from what I understand the money is never actually owned by the person it is paid to, so it makes sense to me anyway that the person who it belongs to (Benefits Agency/Government) should ensure it goes where it is meant for.

[enaid]

Re: First Right of Appropriation...offsetting debt against benefits RBS

Also would the FOS disclose how many complaints they have actually had about this, if indeed any?

[Amethyst]

Re: First Right of Appropriation...offsetting debt against benefits RBS

Have written to Citizens advice ref the advice to ask if they have stats etc and why they offer that advice.

[Amethyst]

Re: First Right of Appropriation...offsetting debt against benefits RBS

After all from what I understand the money is never actually owned by the person it is paid to, so it makes sense to me anyway that the person who it belongs to (Benefits Agency/Government) should ensure it goes where it is meant for.

As soon as it hits your bank account it is owned by you.


And yes, good idea to ask the FOS for figures on complaints and what their policy/guidance is on it -seeing as the councils recommend taking it to FOS.

[Amethyst]

Re: First Right of Appropriation...offsetting debt against benefits RBS

Also will write to corby council about this as it is wrong

The Social Security Administration Act 1992 provides certain benefits such as Housing Benefit to be ‘inalienable’.
The legislation that can be quoted in any approach to or complaint to a bank should include section 187- “Subject to the provisions of this Act, every assignment of, or charge on-
(a) benefit as defined in section 122 of the Contributions and Benefits Act;
(b) any income-related benefit; or
(c) child benefit,
and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors”
.

[Amethyst]

Re: First Right of Appropriation...offsetting debt against benefits RBS

Citizens advice report - march 2008



6 Set-off and client’s right of appropriation

• 6.1 Banks often take money out of an account to pay debts owed to them without checking the customer’s circumstances first. This can have major implications where benefits or low wages are paid into an account and can result in rent arrears or lack of money for food. We have experienced some cases where we have advised our clients to return to the bank to instruct them that payments made into their account are to be used to pay for specific items (the right of appropriation) but the frontline staff have been unaware of the client’s right to do this.
  

• • A client ran up an overdraft on her bank account. She is a lone parent in receipt of income support. The client was not allowed to withdraw any money from the account, and as her benefit was due to be paid into the bank she was concerned she would not be able to buy food or nappies. The CAB wrote a letter on the client’s behalf using the first right of appropriation for the client to withdraw £50 on the day her benefits were paid into her account. When the client took the letter to the bank she was told that she could take £20 out but she should get a job to pay her debt and pay a babysitter.
    

• • A client with a 3-year old child, living on income support, lost her purse and cheque book and had to apply for a crisis loan to cover the shortfall. Two cheques were due to go out of her account, and she asked the bank to put a stop on them. The bank refused and therefore the client’s crisis loan amount was taken out of her account to cover bank charges, leaving her with no money for food.
    

• • A pensioner found that their pension was being eaten up by the overdraft facility on the bank account. The bank rang the bureau to request an appointment for the client to discuss their financial situation. The bank’s representative was unaware of the right of appropriation, which the CAB adviser had to explain to them.
    

6.2 We therefore welcome clarification in the 2008 Code reminding banks that set-off should not be used to pay off non-priority debts to the detriment of priority debts or reasonable day-to-day living expenses. It will be essential for banks to ensure that staff training is provided on this issue.



Download word doc http://www.transact.org.uk/core/core...oad.asp?id=406

[enaid]

Re: First Right of Appropriation...offsetting debt against benefits RBS

http://www.hinckley-bosworth.gov.uk/...Image65625.PDF

This is where I got the idea the money was not actually yours as it says in here you are in fact just an agent.

[natweststaffmember]

Re: First Right of Appropriation...offsetting debt against benefits RBS

My understanding of that was specifically Housing Benefit/Local Housing Allowance because the payment is intended for the Landlord.

[enaid]

Re: First Right of Appropriation...offsetting debt against benefits RBS

My understanding of that was specifically Housing Benefit/Local Housing Allowance because the payment is intended for the Landlord.

Yes I agree but that is for rent and Council Tax, but surely this must also include child benefit in some way, as you are only basically the trustee of that money.

[Tools]

Re: First Right of Appropriation...offsetting debt against benefits RBS

Some relative caselaw

Devaynes v Noble (1816)

Deeley v Lloyds Bank (1912)

Sherry, London & County Banking v Terry (1884)

[Sapphire]

Re: First Right of Appropriation...offsetting debt against benefits RBS

Ok here's my thoughts......

Why don't the benefits people pay direct to landlords, council tax et al? I'm sure thats what used to happen years ago.
As far as any other benefits are concerned then why don't the benefits people advise claimants to have them paid directly into either a post office account or something similar to the Nationwide Flex account?
All it would take is a letter to go out to all existing claimants and a leaflet in with the forms for new claimants, advising them that if they are in trouble with their banks that there is a way round it all, instead of letting people go through all this all the time.

[Amethyst]

Re: First Right of Appropriation...offsetting debt against benefits RBS

Housing Benefit/LHA will only go direct to the landlord if you are ''incapable'' of managing your finances.

Giro cheques are being phased out now too, I had a letter from DWP informing me I need to open a basic bank account or use my POCA (post office card account) for my Income Support. Actually I did mean to post the leaflet up so will dig that out.

I chose to use POCA and cash so I don't have to deal with charges, although I have to make a little more effort to pay bills and lose out on the DD discounts.

working on a reply to Barclays now, Citizens Advice have a couple of decent reports on benefits and bank charges with some good examples so will quote some of that back at them and try and get something SPECIFIC relating to FROA.


also writing to DWP about Housing Benefits etc to find out what their opinion is on what the banks should do on receipt of FROA requests.

AND FOS have a request in now on complaints received/concluded involving FROA. Have asked Nick Charleston as he was helpful last time.

Dear Nick

I realise your current years figures will not be published until May, however I have an enquiry regarding a specific area of complaints with regards Bank Current Accounts which is not broken down in your annual report from 2007/2008.

I would like to know the numbers of complaints with regard to an individuals right of first appropriation, and how many are upheld or refused. I would also like to ask what guidelines the Ombudsman follows when adjudicating in such cases. Primarily these complaints will be where an individual has asked the banks to allow a housing benefit payment to enter and leave the account without being taken by the bank to pay charges or unauthorised overdrafts, as is the individuals right, and the bank has ignored the request or turned the request down.

If you require further information please feel free to ask.

Kind regards

Sharon

worth an ask isnt it

The Case law Tools posted has some very interesting things in in relation to credit card appropriation of payments. This Claytons law (
Devaynes v Noble (1816)) part says that if neither party appropriates payments then they should go first out first in, however I THINK that the credit cards T&Cs covers their appropriation of funds paid to them to charges first, cash advances last, and I am not sure if the consumer(payee) of the funds can override that T&C'd appropriation by defining which part of the debt the payment should go towards (thinking if you can then when you make a payment you could specify it is to repay cash advance of £100 made on X/X/XXXX thus buggering up their charging the huge interest on that portion for so long?) so that needs looking at. The payee gets right of appropriation BEFORE the creditor, so just trying to work out if T&Cs remove that right or not. Just another area am looking at.


This is interesting from 2005 regarding amendments to the consumer credit bill - Lords Hansard text for 8 Nov 2005 (51108-41)

[Amethyst]

Re: First Right of Appropriation...offsetting debt against benefits RBS

Replied to Barclays thus

Dear Catharine

Thank you for your prompt response to my enquiry. It is heartening to see Barclays are taking a positive stance on helping vulnerable users of your services.

However we do appear to have negated to address the main point of my enquiry. That of Barclays policy with regards to an individual exerting their first right of appropriation.

You may be aware that Citizens Advice, and numerous councils and government departments offer advice to consumers in a situation where the bank have indicated their intention to appropriate funds to pay off overdrafts/unauthorised overdrafts or to pay banking charges/fees where this would leave an individual in a position where they would be unable to afford their basic living requirements. Councils specifically advise the use of the first right of appropriation in circumstances involving Housing Benefits or Local Housing Allowance payments.

How does Barclays treat requests for appropriation such as this, and is there a bank wide policy, or staff training on handling these requests?

For your reference in case you are unaware of such requests a typical request may read;

Quote from Warwick District Council.

Dear Sir/Madam,
Re: Right of Appropriation
Account Number: (Enter your Account Number)
I am writing to inform you that I am due to have Housing Benefit payments of £ (Enter value of Housing Benefit Payments) paid into my account on (Enter date of payment), and wish to use my first right of appropriation for this money, for the following purposes:
Rent £ (Enter value of your rent)
I have set up a standing order / direct debit / will withdraw the money for the above use, and I would be grateful if you would ensure that any other payments out of my account do not interfere with this withdrawal.
(Add details of the future regular payments if they will be regular payments of Housing Benefit).
Yours faithfully
(Signature)


I look forward to hearing from you.

Best wishes