Legally can the bank take my child benefit and use it to pay their charges?

[CountessVonKnackerstein]

I've been wondering this as I have not been able to access any money from my account with hsbc (over overdraft thanks to their charges and they will not budge on helping me pay them back by "freezing" them, capping them or anything ) and child benefit and tax credit has been paid in by hmrc.
Any ideas if I can get it back or not?
Am skint!!

Yes they can take it. Any money paid into the account will be used to offset any money owing. If you're skint, suggest you get your child benefit paid to another account as soon as possible (with a different institution). However, you will be paying charges on charges for as long as your account is in debit so best to pay it off quickly or you will be deeper in debt.

Thank you. I have opened another account with Natwest (who are being extremely helpful, I must say) and the only direct debits I didn't cancel were the child benefit ones. Durr! :(

I thought that the banks were not allowed to use any income related benefits(tax credits,in your case)to reduce bank charges,I thinks its called something like right of appropiation,try googling what you have used for your thread name,the consumer forums may help you.However having said that I think you have to inform them in advance so I dont think you have much chance of getting your money back.

Ds got himself into a similar situation and the staff in the branch were no help at all but when he phoned thecall centre,he was able to come to an agreement on freezing the charges and agreeing a repayment plan.Good luck.

DP had this with his benefits. You need to look up "inalienable benefits". I don't know how child benefit comes into it but if you are on benefits, the amount you receive is the absolute minimum that the government have decided a person needs to live off so banks aren't allowed to take charges out of it thereby leaving you with less than the minimum.

moneysavingexpert thread here

I stand corrected!

They can do this to accounts, but also must not drive you into hardship, which fits with what was posted above. Try CAB for specific advice?

Thanks all....I looked at that moneysaving forum last night, there's no definitive answer is there unless am missing it!
Am still not sure what to do to try and get the £380 back.
I am going to write to hsbc with my case, (perhaps pleading insanity) and hope desperately they will just freeze the charges, give me a chance to pay it off!

Hey Countess

Why not try writing a letter like this one:
www.consumeractiongroup.co.uk/forum/showthread.php?123634-can-your-bank-take-your-child-beneft-money-to-cover-your-overdaft

Scroll half way down the page and there's a mockup of a letter you can use.

Hope you have some luck with getting your money back.

DP went into his bank and explained that he was in financial hardship and went through his outgoings vs what he received in benefits with one of the advisors (not counter staff). He ended up getting his charges paid back as his benefits were inalienable and he was in financial hardship. It's worth noting that the bank staff had no idea about inalienable benefits until he quoted the info to them.

child benifit is def included by this act

Thanks ivykaty! I have been looking for that.
I'll try the letter now, too, thank you all.
I'll update you as to results. :)

u can also contact the financial ombundsman about unappropriate bank charges, they will take up your case, though not sure about the child benefit, though they are an excellant service and free of charge, and will fight your cause, give them a phone, or send a letter. fingers crossed you will get this back. oh there is also a thing called unappropriate lending, which you can also claim your money back. dont know much about it, but its to do with the banks lending people money, overdrafts etc when they were maybe high risk of missing payments. hope this all helps

Thank you weemocky, I'll look into that as well.

Well, the novel letter is written, signed by us and ready to post tomorrow.
All I need now is the address where to send the copies to the chief executives (marked private and confidential of course) anyone know if it's the 8 Canada Square address?
Thanks!

I suggest that you open a new account at the Post Office or a building society and ask that your child benefit be paid into that account instead.

We've opened a new account at Natwest, the manager says he's in all the time, knows our name, says hi to the kids, gives them colouring books and has an "open door" policy. But thank you for the suggestion!

so does this mean that all the bank charges that have been taken out of my benefits (income support, child tax credit and child benefit) for failed direct debits can be reclaimed by myself? thats over £700 in charges over the last 2 years

It might do....but there are so many conflicting messages on the Internet. I'm going to try it anyway!

Well I got a reply off Hsbc today telling me to piss off basically.
What's the next step?! Financial ombudsman?
They want proof we are in difficulties, how much proof do they need?? They took my child benefit and left us in the shit. :(

Sorry to hear that, Countess. I work with a free Debt Advice centre, and we use something called a Common Financial Statement when negotiating with creditors. We do a detailed Income/Expenditure form with our client, and this produces a summary sheet that gets sent out to creditors showing how much you can afford to repay. You could probably produce something like that yourself.

If you have debts aside from the overdraft, would you consider putting them all into a Debt Management Plan? It would mean that your credit rating would be shot - but for many of our clients that is already the case by the time we see them. You could increase repayments again when your financial situation is more stable.

That's interesting, thank you. I just don't know where the wages go.

You are not alone in that!

Update:

Child benefit and tax credits dont share info, neither will they write a letter to the bank asking them to return the money that they have paid into the Hsbc account in error.
The reason? The Computer Says No.
They can't just write a letter, it has to be computer generated as it cones from The Government.
Hmm.

He said my best course of action was to write to the Child Benefit Office and ask them for a letter saying it was paid in error. Like that'll help!

They share info when it suits them. When I move and phone Tax Credits to tell them, they usually offer to inform Child Benefit for me. And it usually works.

Ag, lucky you! they didn't want to help me at all.