Overdraft fees & benefits.

Discussion in 'benefits and housing' started by moody, Dec 6, 2018.

  1. moody

    moody Being alive increases risk of death.

    Can a bank take overdraft fees from benefits paid into my account?

    I have been told by someone that banks cannot legally debit fees from benefits. They told me I should be able to reclaim some if not all of the charges the bank had debited from my account.

    My example is that I was working couple of years ago, full time, decent wage, upgraded my account at the time to include overdraft facility.

    Unfortunately I had to give up work to become a full time carer for my father who was terminally ill so was in receipt of benefits as a result.

    Now my bank charges me for an overdraft fee and an account fee monthly which I'm ok about, but the thing is, partly my own fault as I was on such a low income whilst on benefits (& still am) I would sometimes go a few pounds over my overdraft limit, causing the bank to charge me an extra 50 quid in fees. As a result, this has perpetuated my debt further as it has become almost impossible to keep my head above water whilst having to deal with such fees, causing me to go over my limit almost monthly.

    Further example, I got paid my ESA the other day, but over 60 quid had been taken by the bank meaning that I'm now 60 quid short before I've even started.

    Any advice welcome.
  2. moody

    moody Being alive increases risk of death.

    I'm with nationwide btw.
  3. yield

    yield zero

    I'll need to double check but I'm fairly sure that banks don't legally have to treat benefits any differently? Have you asked the bank? They might refund the charges as goodwill.
  4. moody

    moody Being alive increases risk of death.

    or a least stop me from going over my limit thus incurring charges that I obviously can't afford.
    UnderAnOpenSky likes this.
  5. crossthebreeze

    crossthebreeze Well-Known Member

    I don't think (but not sure) they have to treat money from benefits any different, but they do have "standards of lending". If you contact them and explain your situation they might cancel the recent charges at least, and its worth asking what else they suggest. This is a good article about getting out of overdraft debt. If you don't feel confident doing it all yourself, get in touch with Step Change, or go to Citizens Advice.

    You say you're paying an account fee as well as an overdraft fee. Do you use things that you get free with the account fee? is it value for money? I know that Nationwide do have accounts with no account fees (but they will still have overdraft fees and charges), it might be worth asking if you can switch to one of those if you think they'll be better for you.

    A few years ago I was at the bottom of my overdraft and got hit by charges a few times, I dealt with it by stopping as many direct debits as possible (which is shit because it means you end up paying more for bills and have to go without some things) and checking my bank balance before using my card. Its a shit situation, but you will get out of it eventually.
  6. cheesethief

    cheesethief Well-Known Member

    weltweit likes this.
  7. cheesethief

    cheesethief Well-Known Member

    With regard to your benefits, the bank will treat it just like any other income. If you think about it, you wouldn't want them treating your money differently dependent on its source, that would be stepping outside of their remit. How would you feel if they decided to treat money from an inheritance windfall differently from wages, for example? It's none of their business.
  8. moody

    moody Being alive increases risk of death.

    I will pop in there today and have a chat with them.

    thanks people.
    crossthebreeze likes this.
  9. wiskey

    wiskey Albatross Admirer

    I have a nationwide account that I refused to have an overdraft on, it does everything I could need (except use the card abroad). They've always been quite approachable in the past see if you can downgrade your account .
  10. moody

    moody Being alive increases risk of death.

    do you still have online banking?
  11. wiskey

    wiskey Albatross Admirer

  12. sheothebudworths

    sheothebudworths Up the bum - no babies!!!

    Defo DEFO do this..they will help you negotiate a payment plan with your bank (which will be some token minimum payment if you're on such a low income - likely not more than a couple of quid a week) and potentially have the interest charges completely stopped, too (albeit along with your ability to access the overdraft, obvs).
    Seriously, call them today - there's loads that can be done here, instead of you trying to climb out of a deeper and deeper hole each week.

    StepChange Debt Charity - Free Expert Debt Advice.
  13. pengaleng

    pengaleng Lil' J Pengele PhD. The Angel of Sesh

    yes, I lived in me overdraft on benefits, dont really know why you tyhink they wouldnt apply charges it's still money.

    banking really needs to be taught in schools.
  14. UnderAnOpenSky

    UnderAnOpenSky baseline neural therapy

    Sounds like you've been sold a premium account with mobile phone insurance and stuff. Basic Nationwide accounts have no standing fee. You should be able to get rid of the overdraft if you aren't in debt.

    Hope you get on OK. They are all bastards really, but I've often found Nationwide to be one slightly better ones.
  15. Epona

    Epona Down with battered parsnips

    The bank cannot keep track of where your income comes from - it just gets paid in and they do not have a separate system for dealing with income from benefits being paid in to an account vs any other source of money coming in.

    If you are paying a monthly fee for having an account, or being allowed to go overdrawn and rack up fees you probably have the wrong sort of account for your needs.

    As others have said, get your account switched to a basic non-fee account

    (And yes, I used to have 2 accounts with Lloyds - a current account and a savings account - when I lost my job and went into overdraft on my current account, Lloyds closed both and took the benefits payments that had been paid into my savings account with no notice that they were going to do so, leaving me with nothing to live on.

    Yes I owed them money, but going hungry because they took everything I had and left me nothing including no bank account, when I would have negotiated to repay, is a horrible situation to be in. They took 2 weeks worth of benefits and I had no food. Some people here on Urban helped out)
    Last edited: Dec 6, 2018
  16. moody

    moody Being alive increases risk of death.

    sorted, downgraded my account, just have to pay 30 quid a month off my overdraft. nice guy on the phone has scrapped next months charges and is going to rebate me 70 quid charges from this month.
  17. geminisnake

    geminisnake a complex mass of conflicting ideas

    For anyone else looking for advice I advise always gettting a seperate bank account for any benefits, that way they can't take anything off it for your 'main' account.

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