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

[Amethyst]

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

I know, it's bloody appalling really. Think it outdoes the ridiculous response from the Home Office last week !

Well I guess they are all a little stressed at the moment and us minions aren't worth a moments effort.

[natweststaffmember]

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

I think the issue is common law and possibly unfair business practices, would TCF(treating customer fairly) or CPUT have any bearing on this?

[natweststaffmember]

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

Amethyst I feel that you may want to write to LloydsTSB to clarify their policy

MoneySavingExpert.com Forums - View Single Post - benefits and bank charges

"Banks do not have to let customers keep any credit whether salary or benefit if they are overdrawn.
If you are overdrawn money comes in overdraft is repaid or reduced etc.

Apparently there is a legal loophole which means that if customers ask for their money (benefits) to be appropriated say to pay a certain bill (eg rent) then the bank has to do this.
As you can imagine if this was widespread it would cause mayhem so as far as LTSB is concerned it can be done once. The bank will agree to it but tell the customer that if they ask again they will be given notice to close the account."


And have you got the number for Specsavers since the title is RBS and not LloydsTSB :o

[Amethyst]

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

Well if FROA is used more than once then its a pretty good indication things are going awry so yes they will close your account and shift you possibly to a basic a/c and suggest other measures as is their obligation under the banking code. Theres no RULE this can be used just once other than bank policies which all differ but its quite obvious that if FROA is needed then theres a problem needs sorting. So I wouldnt see it as a necessarily bad thing.

In most of the cases where I would advise using the FROA I also advise shifting to another bank and basic account and putting LHA/HB payments in a seperate account used SOLELY for paying rent, as well as looking at DD's and where the problem has come from. Pretty much thats what we want the banks to be doing.

FROA is a temp fix for an immediate urgent problem, thats all.

[natweststaffmember]

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

http://www.adviceguide.org.uk/c_bank..._societies.pdf

Nearly missed it, bottom of page 1

[Amethyst]

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

Nice snippet from the BBA against that bugbear of mine, financial inclusion...

Consumer Focus has correctly identified the priority issues in extending financial inclusion, and the UK's banks are already taking considerable steps to address these:

• We agree that the Post Office - and the Post Office Card Account - can bring more people into banking. Many people who do not have access to a transactional bank account use a Post Office Card Account: if it were to offer additional services many low income customers may benefit. And the Coalition's recently-published Programme for Government specifically announced that Post Office accounts were to offer new services.
• We agree there are considerable benefits to be gained from using direct debits. Banks must also recognise that many people feel comfortable operating in cash as it allows them to budget better. These people should not be compelled to open an account, and their choice to operate in cash should not be seen as inferior.
• Banks are already answering Consumer Focus' call actively to help those in financial difficulties. Section Nine of the Lending Code requires banks to proactively contact customers when they become aware that a customer is heading towards financial difficulties. It also requires banks to direct customers to sources of free, independent money advice. The BBA's industry guidance, recently confirmed by the Financial Services Authority, ensures banks refer to basic bank accounts in their current account literature and offer them actively to appropriate customers.
• Apart from the basic bank account other products have been developed to help low income consumers. The Savings Gateway will provide 50p for every £1 saved and is designed to help low income customers develop a saving habit.

Consumer Focus does not mention the role third sector organisations and government have to play. The reality is, as acknowledged by the Financial Inclusion Task Force, there is a limit to the demand from low income customers for banking facilities, though banks continue to open 40,000 basic bank accounts every month. Third sector organisations and government will have to work in partnership with industry to tackle this problem. Consumer Focus should also note that the new consumer financial education body which is being funded by industry will help to provide that practical support it says low income customers need.

As recently as last October, the banking industry was able to confirm with HM Treasury the achievement if their shared goal to halve the number of unbanked households in the UK. At the current rate of 40,000 new basic bank accounts per month, this number should halve again in the next five years.

The BBA said

" The BBA believes there are benefits to having a bank account - and from using services like direct debits - but these should not be forced on people. But the reality is, as acknowledged by the financial inclusion taskforce, there is a limit to how many basic accounts banks can open as it is as much a question of demand as supply. Banks are still opening around 35,000 basic bank accounts a month and the previous government announced our shared goal was met in October 2009.

"However, many people are comfortable operating in cash as they feel it helps them budget better. And their choice to operate in cash should not be seen as inferior. We do agree the Post Office and the Post Office Card Account have a positive role to play and, if Post Office accounts had more functions, low income customers could stand to benefit.

"Banks actively seek to help customers and the Lending Code requires subscribers to proactively contact customers if they aware people are heading towards financial difficulties. The code also means banks signpost sources of free independent money advice. The new consumer financial education body - funded by industry - will help provide practical support and help for customers. "

Was in response to a Consumer Focus press release in June

-

On the margins – 9 June 2010

For most people, running their lives without a bank account would be unthinkable, yet nearly a million adults in Britain have to cope without one, living almost entirely in the cash economy. On the margins (PDF 872KB), our new report, explores the experience of some of the most vulnerable individuals in 21st century Britain and why they do not have even basic bank accounts - and as a consequence miss out on the benefits many of us take for granted. A Summary (PDF 297KB) version is also available.

[Amethyst]

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

Useful info for the Offsetting FSA changes to BCOBS consultation.

Thinking of doing a chapter in our response about FROA and offsetting benefit payment against overdrafts. Do we think it is relevant ? And can I include reference to the RBS internal Doc ?

[Amethyst]

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

http://www.barcouncil.org.uk/media/6...a_williams.pdf
http://www.moneyadvicetrust.org/imag...28207%29KB.pdf

http://www.fsa.gov.uk/pubs/cp/cp10_15.pdf page 42 onwards

http://www.fsa.gov.uk/pubs/handbook/hb_notice107.pdf