Bank right to offset credit card bill of deceased.

[melia]

My Dad recently passed away. He left no will and no estate except £3100 in an Isa. My mum went to the bank to see if this money could be released to pay the funeral bill of £3200 (my sister and I had already paid another £600 separately for flowers etc). The bank revealed that Dad had a credit card which Mum didn't know about with a balance of £800. They said they would use the right of offset to pay this first and then release the remaining £2400. I wrote to them querying this as my understanding was that legally debts had to be paid in a strict order with funeral bills being first. I spoke to the bank today and they said that a letter was on it's way to me that basically says that this decision will stand - they have cleared the credit card balance as this is in their terms and conditions and this overrules the legal order of debts. Should I accept this now or challenge it further? (The info on the financial ombudsman site re the right of offset seems only to apply to a living person). I may be misreading it but it seems like their terms and conditions are at odds with the law?

Many Thanks

They probably have a lien over it.

I think they are wrong as the funeral bill has to be paid first and before any other bills are paid.
I believe you are right in that offset only applies when a person is alive.
As it is the funeral cost more so they would have had to write off the credit card and I think they have been very cynical and are exploiting your dm and your family when they are vulnerable and distressed.
Write to the bank again asking them to release the full balance enclosing copies of all the funeral bills and flowers.
If they refuse I would then write once more saying you will take it further. If they totally refuse then write to one if the financial journalists like Jessica from the Saturday telegraph. They normally don't get involved when cases have been referred to the ombudsman so I would wait to see what happens.

Welsh is right, the funeral costs are a priority and are the first thing to be paid as other creditors must wait. You can go in and speak to the manager, they should get this sorted for you. My father's bank tried to do this also, meaning there wouldn't be enough in his account for his funeral. My mother was deeply distressed and I had to go into the branch to sort this out.

I'm so sorry for your loss, this isn't what you or your family need at the moment. Please put in a complaint.

www.thewillexpert.co.uk/should-deceased-persons-estate-pay-bank-loan.html

This answers your query. Its a slightly different scenario as it's a bank loan not a credit card debt. But the bank can't take the money.

My missus is a dead good trust and probate solicitor. She tells me that the prescribed order that debts are to be paid in is there to protect executors when faced with disappointed creditors.

As far as the bank is concerned, if there is something in their T&Cs that says they can do it, they are within their rights to do so. She warns that you should be careful who contracts with the funeral service, and should be applying for all the grants you can to help with burial costs.

Hi

Thank you for all of your answers. Just a few more details in response to what you have all said. We have spoken face to face to the branch manager - understanding but referred to credit card department who said they would offset. I wrote a lengthy letter to 'manager of correspondence' (whatever that is, as advised) and cc to probate dept and manager of credit card services. Explained re funeral bill and my understanding of order of debt plus referred to financial ombudsmen's website which says that right off offset must also follow certain criteria (ie to cover only a missed payment and not full balance - this is why I assumed that this might only apply to a living person - ie Dad has not missed a payment because account is suspended but clearly bank knows he will not be making anymore payments). I got a very short reply, following the phone call mentioned in my first post, along the lines of 'we can do it, so say our legal dept, so we have'. They have sent me a copy of the terms and conditions but this only paraphrases the financial ombudsmen criteria - saying that they have the right to pay any missed payment from an account that is any credit. However this is not exactly what has happened here?? so do these terms and conditions really apply do you think? - collaborate I'd be grateful for you wife's advice here.

At the moment I'm thinking that I reply asking for them to repay the money, reaffirming the order of the debt and questioning the fact that the terms and conditions do not seem to fit exactly with this scenario. Mum needs to withdraw the money that is left (£2400) to pay towards the funeral bill - but I will put in the letter that this does not mean that we accept what they have done. I guess I can then say that I will take things further if they do not repay the money. I'm not expecting to get anywhere to be honest but do feel angry - I know that it was Dad's mistake to have the card/ debt in the first place but when I go onto Yorkshire Banks website and they are promising to waive various fees etc it feels like not much for them to waive this so that a funeral can be paid for.

By the way Mum is not entitled to any benefits etc for this and obviously I would borrow the money myself to make up the shortfall rather than have Mum worrying (but obviously being a Mum this is causing her some more worry(!) because she wanted Dad's Isa to cover this so that we weren't burdened with it.

Yes, bank has right to offset credit card bill of deceased. Banks have authority to charge all the credit. Apart from this they have right to take another?s property if an obligation is not discharged.

www.total-apps.com/articles/credit-card-processing/credit-card-processing-equipment.htm