Shelley had a current account and loan with her bank. When the bank took money from her current account for a loan repayment, she complained that it created a number of difficulties for her.
The difficulties had arisen shortly after Shelley changed employers. Her pay continued to go directly to her current account but the timing and pattern of the payments changed. As a result, there hadn’t been enough money in her current account for her monthly loan repayment.
Ten days after that payment was due, Shelley's new employer deposited a sum of money in her current account, representing only a part of what she was owed. Shortly afterwards, Shelley checked her account online. She found that the bank had already taken most of that money and used it to pay half of her outstanding loan repayment.
She rang the bank to complain. She said that its actions had made it difficult for her to keep track of her finances and plan her spending. The bank told her it would make a note of her new circumstances.
The following week, Shelley received some back pay from her former employer. Again, on checking her account she found that the bank had already taken most of the sum deposited. It had used it to meet the remainder of her outstanding loan repayment.
The bank rejected Shelley's complaint about its actions. It said it had been entitled to take the money for her loan repayment.
Unable to reach an agreement with the bank, Shelley came to us.
What we said
We looked at the records for Shelley's current account. It was clear the bank's actions had meant that some of her other commitments – including direct debits and standing orders – had been returned unpaid.
This had resulted in her incurring charges and interest. We accepted Shelley's argument that the bank’s actions had made it very difficult for her to manage her account. It had also caused her more inconvenience than she might reasonably have expected when moving to a new employer and a different pay schedule.
We said it would have helped matters if she had contacted the bank before she changed employers – to discuss how the transition to her new pattern of payment could best be managed. But we couldn’t see why the bank didn’t contact Shelley to agree a course of action as soon as it was clear she didn’t have sufficient funds to meet the loan repayment.
We said the bank had acted unfairly in the way it had set off the accounts. It agreed to cancel the interest and charges she’d incurred on her loan and current account as a result of its actions.
Shelley had already made an additional payment to her loan account to cover the missing payment. And the bank agreed to alter the date of her monthly loan repayments to suit her new pattern of pay. The bank also agreed to pay her £250 in recognition of the stress and inconvenience it had caused her.