Banks 'legally raiding' consumer accounts to settle debts

Posted by Cheryl Bennett

UK consumers may like to keep a closer eye on their financial concerns as it has been revealed that banks are raiding accounts to settle the debts on loans and cards through the power of set-off.

This allows creditors to take cash from one account without permission to cover that owed on a range of products such as credit cards, This is Money reports.

And according to Citizens Advice, this practice is increasing, with an 80 per cent climb in the number of institutions using it being seen in the last 12 months.

One person to have been affected is Audrey Wheeler, who told the news source of the shock she felt upon finding that £200 in savings had been used to pay off her overdraft.

"I thought I had been the victim of fraud," she remarked.

According to the Financial Services Ombudsman, in order for set-off to apply, debts must be due and payable, with all accounts in question held by the same firm. ADNFCR-2353-ID-800071945-ADNFCR

20/09/2010 12:23

News category: Consumer

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