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The following letter has been sent to Cheif Executive of Lloyds Bank and copied to the Chairman of the Treasury Select Committee.
J. Eric Daniels
Group Chief Executive and Director
Lloyds TSB Bank PLC
Head Office
25 Gresham Street
London
EC2V 7HN
4th June 2008
Dear Mr Daniels,
OPEN LETTER on your banks policy with regard to social exclusion
CC Rt Hon John McFall MP
I am writing to you, as part of the Administration Team at the rapidly growing Legal Beagles Consumer Group, to request information about your banks current policy with regards to an individuals first right of appropriation.
I am aware of Lloyds TSB's considerable efforts to help consumers who have, through no fault of their own, suffered financial hardship. However, despite your undoubted efforts in the matter, I would like to raise some issues that seem to be tarnishing your otherwise impeccable reputation.
I am sure you are aware that an individual has the ability, under common law, to assert their right of first appropriation where money intended to cover essential living expenses are being taken by the bank in what may (by some) be considered unfair charges or in fulfilment of other debts. This "Right of first Appropriation" allows a customer to assign any funds entering their account to finance basic survival needs. This is something all the banks should be aware of, but sometimes junior members of staff do not understand this process since it is not very often used. These occasions cause significant financial hardship.
Our members have experienced a number of instances of a lack of understanding of this right by some of your branch staff.
Examples:
Mr A -
''Lloyds staff told me if I enforced my first right of appropriation the bank would shortly after issue me with a 30 days notice of account closure.''
Mrs F -
''I was told as you've come in to the bank with this letter of appropriation we can do this only once and we need you to come in to the bank on Monday, to draw the money out and so that we can speak to you about your account, we need to cancel all your direct debits and then close your account. ''
Mr C -
'' LLOYDS TSB are insisting that I cannot use my first right of appropriation, even though I have had to use it to pay my priority bills on three occasions. Lloyds have been taking charges from my account and leaving me with nil funds. I have complained and argued with those fine people in the collections dept and have had success in the past, with refunds been made by the bank. The branch staff and management have been nothing but obstructive and on my production of the letter of appropriation at the branch it leads to confusion embarrassment and total non co-operation from them. Today’s visit to serve them with the letter of appropriation was again confrontational by them and upon instructions from the said collections dept I was informed that they will no longer conform to my right of first appropriation. ''
You may also be aware that much council recommend the use of an individuals first right of appropriation with regards to allowing housing benefit payments to be used to pay rent. It does appear from the councils that they too have experienced problems with some bank staffs knowledge of the law and have assigned benefit payments to cover debts instead of allowing individuals their basic living expenses, indeed Hinckley and Bosworth Borough Council in their advice leaflet on the use of the first right of appropriation clearly state '' Your bank may disregard this request. If this does happen you would then have to complain and involve the banking Ombudsman, which could take some time to resolve. ''.
I am aware that you have made several commitments via the banking code to act reasonably to debtors in poor financial circumstances, and of the ongoing discussions and evidence you have submitted to the Treasury Committee's reports on social exclusion. Therefore, I would ask if you have any policies on tackling poverty, and ensuring that your customers are able to access benefits such as housing benefit and jobseekers allowance where they are necessary to fulfil basic needs.
As I believe this matter to be of great media and public interest while I am aware you are extremely busy I would ask you to acknowledge this correspondence as soon as possible, indicating when you will be able to answer the questions raised in this letter.
Yours Sincerely
LegalBeagles
Group Chief Executive and Director
Lloyds TSB Bank PLC
Head Office
25 Gresham Street
London
EC2V 7HN
4th June 2008
Dear Mr Daniels,
OPEN LETTER on your banks policy with regard to social exclusion
CC Rt Hon John McFall MP
I am writing to you, as part of the Administration Team at the rapidly growing Legal Beagles Consumer Group, to request information about your banks current policy with regards to an individuals first right of appropriation.
I am aware of Lloyds TSB's considerable efforts to help consumers who have, through no fault of their own, suffered financial hardship. However, despite your undoubted efforts in the matter, I would like to raise some issues that seem to be tarnishing your otherwise impeccable reputation.
I am sure you are aware that an individual has the ability, under common law, to assert their right of first appropriation where money intended to cover essential living expenses are being taken by the bank in what may (by some) be considered unfair charges or in fulfilment of other debts. This "Right of first Appropriation" allows a customer to assign any funds entering their account to finance basic survival needs. This is something all the banks should be aware of, but sometimes junior members of staff do not understand this process since it is not very often used. These occasions cause significant financial hardship.
Our members have experienced a number of instances of a lack of understanding of this right by some of your branch staff.
Examples:
Mr A -
''Lloyds staff told me if I enforced my first right of appropriation the bank would shortly after issue me with a 30 days notice of account closure.''
Mrs F -
''I was told as you've come in to the bank with this letter of appropriation we can do this only once and we need you to come in to the bank on Monday, to draw the money out and so that we can speak to you about your account, we need to cancel all your direct debits and then close your account. ''
Mr C -
'' LLOYDS TSB are insisting that I cannot use my first right of appropriation, even though I have had to use it to pay my priority bills on three occasions. Lloyds have been taking charges from my account and leaving me with nil funds. I have complained and argued with those fine people in the collections dept and have had success in the past, with refunds been made by the bank. The branch staff and management have been nothing but obstructive and on my production of the letter of appropriation at the branch it leads to confusion embarrassment and total non co-operation from them. Today’s visit to serve them with the letter of appropriation was again confrontational by them and upon instructions from the said collections dept I was informed that they will no longer conform to my right of first appropriation. ''
You may also be aware that much council recommend the use of an individuals first right of appropriation with regards to allowing housing benefit payments to be used to pay rent. It does appear from the councils that they too have experienced problems with some bank staffs knowledge of the law and have assigned benefit payments to cover debts instead of allowing individuals their basic living expenses, indeed Hinckley and Bosworth Borough Council in their advice leaflet on the use of the first right of appropriation clearly state '' Your bank may disregard this request. If this does happen you would then have to complain and involve the banking Ombudsman, which could take some time to resolve. ''.
I am aware that you have made several commitments via the banking code to act reasonably to debtors in poor financial circumstances, and of the ongoing discussions and evidence you have submitted to the Treasury Committee's reports on social exclusion. Therefore, I would ask if you have any policies on tackling poverty, and ensuring that your customers are able to access benefits such as housing benefit and jobseekers allowance where they are necessary to fulfil basic needs.
As I believe this matter to be of great media and public interest while I am aware you are extremely busy I would ask you to acknowledge this correspondence as soon as possible, indicating when you will be able to answer the questions raised in this letter.
Yours Sincerely
LegalBeagles
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