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

[enaid]

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

Well going off that you would think they know all about it and actually let people use it.

[Amethyst]

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

We need a guinea pig

[natweststaffmember]

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

Where is that emoticon for manure?
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We need a guinea pig

Totally 100% agree with you.

[enaid]

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

Well it states you have to be specific about the 'priority debt' you cant just say living expenses. It's the word 'debts' that is the important bit I think. A priority debt would be just same as in hardship claims IMO, mortgage/rent, C/Tax and Utilities. Drawing out or doing a FROA for living expenses would not be classed as a debt. That's just how I see it I could be totally out of line.

[enaid]

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

This one would do it's in disguise too lol

[Amethyst]

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

That seems to be what Natwest are saying, however food, nappies etc is priority and FROA is for essential living not just debts, so will try clarify that with them...if a payment in is JSA, HB or CTC etc and you pay everything in cash because using DD's etc end up with charges then FROA should cover you for that as well.

[enaid]

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

Well they seem to make it a very grey subject yet again. Once again edging around the facts and the law.

[Amethyst]

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

Reply from Nationwide

[IMG]file:///C:/Users/Sharon/AppData/Local/Temp/msohtmlclip1/01/clip_image001.gif[/IMG]

Legal Department
Nationwide Building Society
Nationwide House
Pipers Way
Swindon SN38 1FN

DX 83653 Swindon Hawksworth
Ms S
Tel: (01793) 656167
Fax: (01793) 652318



By e-mail only:
Dear Ms
First right of appropriation
Thank you for your e-mail of 9 March 2009 addressed to our Chief Executive, Graham Beale. Graham has asked me to respond to you on this issue.
There is a considerable amount of information available with respect to the right of a borrower to decide for what purposes any money that he repays to a lender can be applied. However, a large part of this information is inaccurate.
Whilst it is true that the common law sets out a general framework under which people can enter contracts, that framework is always open to be customised by the express agreement of the people concerned. In the case of our current accounts, the terms and conditions of that account are a good example of this agreement to vary the common law position. For example, times for delivery of our services (such as when money paid in will show as a credit to the account) are expressly set out rather than left to the “within a reasonable time” that would otherwise be implied by common law.
More specifically, the terms and conditions of our current account incorporate Nationwide’s Rules (one of our constitutional documents, which govern the relationship between Nationwide and its members). In particular Rule 5(b)(iii) states that:
“The Society may withhold all or part of any … [current account] … and use it to pay or reduce any debt owed to the Society which is due or overdue for payment.”
This means that Nationwide can use any money deposited in an account to set off any debt owed by the account holder to the Society.
Nationwide does, however, have in place a number of policies relating to the fair and reasonable treatment of customers who are in poor financial circumstances. Please see the following page on our web site for a more detailed list:
http://www.nationwide.co.uk/payment_...es/default.htm
Yours sincerely
Liz Kelly
Head of Legal Department

[natweststaffmember]

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

Which information is actually accurate re the First Right Of Appropriation cos she hasn't actually commented on the Customer's right merely the Right of Set Off and how they deal with hardship. In fact, the response was utter garbage.
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nationwide haven't actually said anything about anything

they seem to indicate that the first right of appropriation is indeed a variation in the contract
and technically could clash with the right of set off.

[Amethyst]

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

no reply from citizens advice or the councils...hmmmmm

will try and call my local council today. failing that i may send the info from the banks thus far to the councils and ask them why they are advising people something the banks don't acknowledge.

good idea or no?


also do T&Cs outweigh common law? I guess they outweighed the penalty argument didnt they

[natweststaffmember]

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

Yep a good idea.

[enaid]

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

Seconded, I don't know how they get away with it but they do.
Maybe get in touch with that Credit Union as well, the one that had the right idea.
Maybe see if the ones that are now doing current Accounts are giving same message.

[Amethyst]

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

Yes thats a jolly good idea, I will write to them today

[Amethyst]

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

reply from CCCS



Hello Sharon,

Unfortunately we do not have any stats or reports on first right of appropriation as we do not measure or record anywhere how successful (or not) we are. All we would do is advise the client as appropriate.

I am sorry I cannot help you any further, but to get more information on what we advise I would point you in the direction of our Helpline - 0800 138 1111.

Kind regards

Pavan

[Amethyst]

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

Lloyds - declined to answer

Nationwide - Whilst it is true that the common law sets out a general framework under which people can enter contracts, that framework is always open to be customised by the express agreement of the people concerned. In the case of our current accounts, the terms and conditions of that account are a good example of this agreement to vary the common law position. .....More specifically, the terms and conditions of our current account incorporate Nationwide’s Rules (one of our constitutional documents, which govern the relationship between Nationwide and its members). In particular Rule 5(b)(iii) states that: “The Society may withhold all or part of any … [current account] … and use it to pay or reduce any debt owed to the Society which is due or overdue for payment.” This means that Nationwide can use any money deposited in an account to set off any debt owed by the account holder to the Society.

Barclays - We do not, however, believe that applying specific credits to specific payments is the most effective approach for customers in this position. It is generally simpler both for the customer and the bank to reach a payment arrangement that in practice leaves the customer with sufficient funds for their basic needs rather than to try to earmark specific funds for specific purposes.

and more positively;
Royal Bank of Scotland- With regards to a specific policy surrounding the ‘First Right of Appropriation’ our approach, when this right is invoked by customers in financial difficulties, is governed by the Banking Code, to which we subscribe. The published guidance on our Code obligations sets out what is expected of us in ensuring that income paid into an account is used first to pay ‘priority debts’ before ‘non-priority debts’. However in discharging our Code obligations we are reliant on the cooperation of the customer to identify what payments are ‘priority debts’. We need to know how much is expected to be paid into the account and when the moneys will be paid. The priority debts with first claim on the moneys require to be identified – if paid by cheque we need to know payee and amount. Direct debits are identifiable by originator. A general instruction to pay only ‘living expenses’ for instance would not be considered sufficient. Of course the moneys must be in the account to be appropriated in this way – if a priority debt cheque or direct debit is presented and funds are not there the items will not be paid and charges will be incurred.
HOWEVER...in their internal document they state ''The bank has no obligation to encash a benefits payment where the payment is offsetting an excess position''

So if you are in anyway over your overdraft limit then they will take your benefits to repay it. If you are in a positive position when the payment hits your account then you can appropriate it.


Have written to Credit union and three councils for their thoughts anyway.