I defaulted on my credit card with my bank. They passed the debt onto a collections company. Just this week I received a sum of money left to me by a deceased relative. As soon as the money cleared in account my bank took the money without notification. I was planning on using the money to pay off higher priority…
The law in England clearly states that they CAN NOT take money straight out of your bank account unless it is part of you Agreement and it is the OC.
Now the fact they had told you the account was now with collections and the bank took the money could be a sticky point. All companies have a internal collection agency so it may say the bank but it may be the collection agency.
If you acc had been passed to collections they had no rite in taking the money so they will have to refund it. If they refuse you need to make complains to the relevant authorities and basically anyone who will listen.
The relevant authorities in England are Trading standards, Office of Fair Trading , Financial Services Ombudsman, The Press. They wont like the bad publicity so just advising them you will go to the press will more than likely give you the money back.
Good Luck you may want to check out the link below they know tons on there.
Basically the Collection Agency cannot unless they seeked a judgement/lien from the Court and won. I assume you are not in the USA. We here have an agency called FDCPA (Fair Debt Collections Practices Act) that governs what Collection Agencies can and cannot do. If the issue is on a Government level (eg: Income Tax, Federal, FBI, etc–yes, they can get the money from your Bank. Other than that, they cannot take money from you. Is the Credit Card Issuer the same Bank that took your money? If so, I believe they can do that. Please feel free to email with any other details. 🙂
In the US, yes they CAN take the money if the credit card company was tied to the bank…it is all right there in your terms of service.
(most people here dont read them)
Basically it says that they (or their agents) can without warning capture the funds in your other accounts to satisfy a default. SInce the collections were acting on behalf of the bank, they are covered in that!
If you took out the credit card in the UK with your bank before 1 April 2007 it may be possible to get it wiped out. Visit your bank (if you can ) asap and insist on the bank returning the money to your account because your legal advisers are checking out the agreement. Then visit this website to get help on the agreement and make sure you take the money out of your bank and put it somewhere else.
I don’t know but from my account collection agencies take money out of your bank account without my consent and bank block my money I didn’t get any call or any letter.
Debit side of direct access to your accountRichard Colbey reports on how some companies can exploit the system and take cash without permissionRichard Colbey guardian.co.uk, Saturday January 24 2004 02.13 GMT The Guardian, Saturday January 24 2004 Article historyA Birmingham woman complained to Jobs & Money that Orange had billed her husband £2,190 after his phone had been stolen at Dubai Airport and used extensively by the thieves before being disconnected.
The mobile phone companies insist in this situation that the customer is liable. They have, however, decided against testing this proposition in the courts, knowing a defeat would be disastrous.
Instead, many companies rely on a battery of threats of blacklisting and debt collection agencies to extort money out of the faint-hearted.
In this case – after our Capital Letters writer, Tony Levene, intervened – Orange agreed that it would not take any steps to get £895 of the alleged debt. However, it had already taken £1,295 out of our reader’s bank account relying on a direct debit, which it would not return.
Direct debit facilities are not meant to enable businesses to help themselves to money to which their entitlement is at best questionable.
Indeed, the direct debit scheme, which is administered by the BACS organisation which oversees most electronic transfers between British banks, offers a guarantee to prevent such abuses.
Although this is spelt out on the forms when one signs a direct debit authority, surprisingly few people seem to be aware of it.
A company intending to take money from an account has to give notice of, usually, at least two weeks before removing it. In that two weeks, the customer can either tell the company not to take the money, and telling the company the debt is disputed amounts to that, or cancel the direct debit altogether.
Our reader’s husband failed to cancel the debit in time. However, if Orange took the money after it realised it was disputed, the guarantee would come into operation, as it would if Orange gave insufficient notice of the amount they wanted.
In those circumstances he could claim a refund from his own bank and leave them to get it back from Orange.
There have not been any cases reported in the courts about the working of this guarantee, but the Financial Ombudsman Service has dealt with several.
Among them was that of a Mrs Brown, who cancelled a direct debit in favour of the private school she had decided to take her son out of. Despite the cancellation, the school took the money. It told her bank when this was queried, that it was entitled to the sum because she was obliged to give a term’s notice. The bank decided that the school was right about that and refused to honour the guarantee.
The ombudsman, however, took a different view. It was irrelevant whether or not Mrs Brown owed the school money, and even if she did, it was not for the bank to decide. The school had abused the direct debit and therefore the bank, probably like our reader’s bank, had to refund the money when requested.
Even worse was the conduct of an insurance company when a pensioner customer cancelled his home insurance with them. They carried on taking premiums under a direct debit.
When the pensioner realised this, he asked the insurer for the money back. It refused saying – wrongly – it had been on risk if there had been a burglary at the home.
The bank did do the right thing and returned the money retrieving it from the insurance company which then threatened to call in a debt collection agency.
The ombudsman made an award of over £1,000 against the insurer because of the distress its behaviour had caused.
Like so much in the world of financial services world, these cases show that however watertight a paper promise may seem, there will always be businesses who try to take advantage of consumer innocence or inertia to get around it.
However, the law and in these cases even the ombudsman, are likely to be on the consumers’ side if a business uses direct debit facilities to take a disputed sum.
· Richard colbey is a barrister
Richard Colbey Barrister
I’ve only ever heard of this happening where the collections agency is connected to the bank…get legal advice because the data protection act may have been breached…general rule is…don’t pay money into an account if you owe money to the same organisation.
I believe they’re allowed to do that, presuming they obtained a court order to do so? Here in the US, the Revenue Service froze my bank accounts without any warning. It was a mess to unravel, and it turned out they had no foundation for their claims.