can they do this

frag420

I need some help here

I have two accounts with AIB. one is in arrears as i lost my job at the start of the year. The account went into arrears due to direct debits coming out. I went into the bank to address this and was offered an overdraft. Usually i would refuse this but i thought it may be a good idea to tie me over untill i got work. I only took enough of an overdraft to cover these direct debits and any more that may come out over the following few months untill such time as i was working again. It was only for 1000.

I got a job last month. I didnt want my first pay to go into the above account as the DD would swallow the amount and i would be left with nothing to survive on for the month. I activated an old account i had to use for wages and wold transfer money over to the other account to pay of the outstanding balance.

Now today i go to take out some money for my lunch and find i have insufficient funds. I checked my accounts on internet banking to see that Aib have transferred all my money from my ' wage ' account into the old account leaving me with eight euros for the month. Nobody called me about this and i certainly did not give permission for tihs transfer. I am just of the phone with aib and am awaiting a call back. I have demanded that the money be put back into my account as i need it for work(petrol etc) rent and general living expenses. I explained that if i dont get the money back i will more thasn likely not be able to do my job thus risking me lossing it putting me in a worse position wherebye i will not be able to pay back anything to them at all.

Can they do this? What can i do about it?


(edit)they have just called me and said because the other account is in arrears then they can move the money over. I have requested that they get someone from head office to call me today to deal with this. I am so frustrated by this as i have always banked with them and as soon as someone has a bit of money trouble they turn their back on them. They had no trouble throwing credit cards and student loans at me when i was in college.

rant over.....................for now at least

romah

Seems to me the bank is completely out of order . no authorisation was given to transfer the monies.

Call the financial services ombudman , Tell them your story and they will give you some advice

Financial Services
Ombudsman
3rd Floor, Lincoln House,
Lincoln Place,
Dublin 2
Lo Call: 1890 88 20 90
Tel: 01 6620899

frag420

cheers Romah,

I am gonna give them another hour or so and if i have heard nothing then i will call their head office.

Will call ombudsman now and see what they say.

thanx again

frag

thesoad

Can you not withdraw money from the account with the overdraft as there should be funds available if the overdraft still stands.

frag420

i only requested the overdraft for 2 months as i dont really like having one so there is no money for me to take from it.

Lizzykins

That's unbelievable and completely out of order. Esp as you did the right thing early on and addressed the problem. I worked in one of the large banks-not AIB- a number of years ago and we definitely could not transfer money like that. Certainly not without referring back to you.

Ogham

It's called "set-off" and all the banks have the right at any time, without notice to the Customer, to set-off and apply the credit balance in any account toward payment of the debit balance on any other account.
It is their money after all
I suspect the ombudsman will tell you the same.

It is one reason why many people advise never to borrow (i.e a formal loan or mortgage) from the bank that you have your current account with.

Lizzykins

But no notice? So they can go in and "raid" your account whenever you owe them money or they "think" you owe them money? I think not. Unless things have changed in the last few years? I'm open to correction though. Where I used to see offset was mainly with business accounts. Occasionally you might see a lien on deposits as security for a loan but I never ever saw an account manager transfer funds from one account to another to cover an overdraft.
OP. Your best bet is to ask the bank to reintstate the overdraft and get it reduced over the next few months. That's if you don't get satisfaction any other way.

GerardKeating

romah wrote: »

Seems to me the bank is completely out of order . no authorisation was given to transfer the monies.

I am sure the OP will find someone (deep, deep, DEEP) in the fine print for the overdraft that authorisation was given for such an offset..

wmpdd3

This happened to me about 1o years ago in collage, left me with no money for the week. Basically same reason was given, in the end I got a token payment.

Was AIB too.

Scuba_Scoper

You were running an un-authorised overdraft on your account.
You will have been paying nearly 21% interest on that money.
(Debit interest + Surcharge interest of 9%)

Having your wages paid into an inactive account was flagged
as soon as the money hit.

The fact that they transferred the money to clear your un-authorised OD
means they copped on to what you did and are not pleased about your
actions.

In these times of lock down credit you should be happy that they have not
asked you to bring your loss making business to another bank.

You haven't said, but you should have talked to your lender who would have
been delighted to extend your OD when you got your new job. Gratz btw.

IMHO you don't have a leg to stand on. Sorry.
Just being Devil's Advocate.

My advice would be: Ask nicely can you have your OD extended and don't
try to pull the wool over your banks eyes in the future. Bad for your Credit Rating.

Senna

Scuba_Scoper wrote: »

You tried to dupe them by lodging into an inactive account

frag420 wrote: »

I activated an old account

Dupe the banks:eek: call the garda:rolleyes:

Sorry OP but its probably in the T&C, did you have the overdraft in place after the wages went into the new account and then the overdaft time limit ended and that when they moved the money over?
I assume this is the case, so the money was not transferred to pay off the authorised overdraft, instead it was transferred to an account with and unauthorised deficit.

stepbar

Op, I seriously doubt you were "offered" an overdraft but more likely given some flexibility to clear same. The bank is well within their rights to off set one credit against a debit should they feel that they may have difficulties getting back any debt you may have. However, I would feel that it's bad form to just do something like this. They should have asked you to term the unauthorised facility. I've noticed AIB have no problems inforcing this term. It's not the first time I've heard of something similer happen.

unclebill98

You can not have one account with a healty balance and another in excess of its limits. Banks do this all the time. Lessons Learnt.

parsi

Ogham wrote: »

It's called "set-off" and all the banks have the right at any time, without notice to the Customer, to set-off and apply the credit balance in any account toward payment of the debit balance on any other account.
It is their money after all
I suspect the ombudsman will tell you the same.

It is one reason why many people advise never to borrow (i.e a formal loan or mortgage) from the bank that you have your current account with.

+1.

When we bought our house (many moons ago) I remember this as one piece of advice that the solicitor gave us. We ignored it as well but it has always been at the back of my mind.

Of course the setoff can often work in your favour if one acount is running a debit balance and the other is well in credit.

Ogham

parsi wrote: »

+1.

Of course the setoff can often work in your favour if one acount is running a debit balance and the other is well in credit.

How do you work that out ? If they want to move money into the account in debt how is that working in your favour??

BillyGoatGruff

Scuba_Scoper wrote: »

You were running an un-authorised overdraft on your account.
You will have been paying nearly 21% interest on that money.
(Debit interest + Surcharge interest of 9%)

Having your wages paid into an inactive account was flagged
as soon as the money hit.

The fact that they transferred the money to clear your un-authorised OD
means they copped on to what you did and are not pleased about your
actions.

In these times of lock down credit you should be happy that they have not
asked you to bring your loss making business to another bank.

You haven't said, but you should have talked to your lender who would have
been delighted to extend your OD when you got your new job. Gratz btw.

IMHO you don't have a leg to stand on. Sorry.
Just being Devil's Advocate.

My advice would be: Ask nicely can you have your OD extended and don't
try to pull the wool over your banks eyes in the future. Bad for your Credit Rating.

Does not compute :P

parsi

Ogham wrote: »

How do you work that out ? If they want to move money into the account in debt how is that working in your favour??

Picture this -

Two accounts (both part of the same "grouping" (eg first five digits of account number the same)

Account A - in credit,
Account B - in debit (authorised overdraft at x%)

Overall Balance is Credit > no interest charged,
Overall Balance is Debit > interest charged.

unclebill98

parsi wrote: »

Picture this -

Two accounts (both part of the same "grouping" (eg first five digits of account number the same)

Account A - in credit,
Account B - in debit (authorised overdraft at x%)

Overall Balance is Credit > no interest charged,
Overall Balance is Debit > interest charged.

Good post, also if you've 5k in savings and 100 in your current and you issue a chq for 200, they may pay the chq based on your savings or move money to cover.

The op does not have much to argue about. Its not fair, but banks will be banks.

Mrs OBumble

frag420 wrote: »

i only requested the overdraft for 2 months as i dont really like having one so there is no money for me to take from it.

There's your clue: your overdraft was "expired" but you were still trying to use it. You were aware of this. So don't be ranting at us now, no sympathy from here ...

amdublin

Plus there would be charges for going outside your OD parameters so it was in your interest that the negative balance was cleared asap.

You owe the money, they are entitled to take it from another account.