Banks: profiting from poverty …

I’m up blogging at this time on a Sunday for two reasons: I can’t sleep and I want to be in the living room by the halogen heater. The cold in the bedroom was giving me a Chaplin matching headaches, I think.

My bank, as you know, has taken £30 in fees from my bank. This is leaving me worrying about having enough bus fares to my part time job and means I simply can’t put the central heating on. I’m already using the emergency on the meter and have no money to top it up once it’s gone; I’d like to have a bath at some point because my mood alone is already making me anti-social.

Nationwide claims the charges – made up of £15 taken twice – are for “unpaid direct debit fees”. I can’t see how this happened because, as far as I’m aware, I’ve not gone overdrawn and have met all my direct debit payments. I’ve cut these automatic payments back as far as I can. I’ve cancelled anything that isn’t essential – that isn’t a utility bill, basically.

Still, living on £67.50 a week it isn’t difficult to go overdrawn by a few pence or a pound so the bank takes the “unpaid direct debit fees” which add up to almost half of my weekly income.

I’ve previously written to the bank quoting the Social Security Administration Act but decided to do so again yesterday, stating:

As I understand it there is an Act of Parliament Section 187 of the Social Security Administration Act 1992 which over-rides banks taking charges from your account if you are in receipt of any of the following benefits:
• Income Support
• Tax Credits
• Child Benefit
• Job Seekers ‘allowance
• Incapacity benefit
• Disability living allowance
• Attendance Allowance
• CSA payments
• Other DWP payments.
These social security benefits are granted to stop hardship and are designed to meet basic day to day needs, and are exempt and are protected under the Social Security Administration Act 1992 sub section 187. from arrestment in terms of section 187 of the Social Security Administration Act 1992 (see Enforcement of Civil Obligations in Scotland, Scottish Executive report, at paragraph 5.245). Section 45 of the Tax Credits Act 2002 Chapter 21 part 1 is an identical provision to the said section 187 of the 1992 Act.  This stipulates that the banks can not apply any charges to money received as benefit, and any such charges are unlawful and therefore disallowed.

This information had been shared with me by Kent Freedom Movement again and I thought I’d see if it would help me get my money back. I managed to get £15 back last time. Unconvinced, though, that this alone would make a difference I also pointed out the situation.

I have £67.50 per week income from Jobseekers’ Allowance. This £30 is a huge amount to lose from my weekly income and has plunged me into very real poverty: I have no money for food or for heating as we head into a cold snap.
I am living within my means and have enough money to pay my outgoings only. I ask Nationwide to please consider the problems this causes – both to my financial situation and mental and physical health – by taking money from my benefits. Almost 50 per cent of my entire weekly income is just too much for me to cope with, in errors such as this or otherwise.
Is there any way in which I can be assured that this won’t happen again? I simply can’t keep going without food or heating without risking my health. If Nationwide can suggest another account type I would be grateful.
I was previously told, however, that the Act doesn’t mean banks can’t take money from benefits. A myth also repeated at Jobcentre Plus when I told them the problem I was having.

Nationwide told me: The purpose of the Social Security Administration Act 1992 Section 187 and section 45 of the Tax Credits Act 2002 is to prevent people’s benefit money being at risk by it being assigned over to a third party in settlement of a debt. It is not intended to prohibit the application of bank charges. Bank charges are in the nature of an expense, and are incurred by the holder of the account; tax credits and benefits are payable in order to help customers meet their expenses, and as such it is legitimate for banks to deduct charges from the balance of an account held in that bank, whether the money paid into the account comes from tax credits, benefits or other sources, such as earnings.

This means we have benefit caps pay while banks enjoy their huge salaries and big bonuses – and Nationwide boasts of its rise in profits to £172m.

And banks can make even more profit from the poverty of others. It means £25 billion in tax is written off for the rich in one day while we’re forced to pay half our benefits in so-called bank charges.

It’s almost impossible not to go overdrawn when you’re living on the very least that a government decides it should give you (after it has created mass unemployment), you can be plunged into abject poverty because someone had to hit a computer key or shuffle bits of paper on a desk when you went momentarily overdrawn. This means should your benefits be late through no fault of your own – such as a suspension you were told wouldn’t happen – then you will incur bank charges.

I’m sure some will still argue that this is legitimate and the banks have a right to charge – but I think it’s despicable. Others will argue that benefits should be difficult to encourage people back to work – but I’m in this mess because I tried to get back to work.

I find it unbelievable that anyone could still be turning against the unemployed as so many of us find ourselves living in poverty but still some imagine that £67.50 per week means those of us without work can afford to stay in bed all day: the reality is it’s impossible to survive on this with your physical and mental health intact and look for work.

… and you try impressing a boss at a job interview when you haven’t had a bath.

[NB: Those worried about how Chaplin is surviving I can assure you he is ok. He sleeps in front of the halogen heater and many months of his refusal to eat beef cat food means he has a beef Whiskas, Felix, Tiger stockpile in times of trouble. For now.]

11 thoughts on “Banks: profiting from poverty …

  1. If you have a PayPal account, put a donate button. I’d be happy to give you a little money, as I’m sure would many others.

  2. I’ve had this problem too, at one time Barclays used to charge £75 for going overdrawn by just a couple of quid. Now at least they only charge £30. but as you say that’s still half a persons weekly income, it shouldn’t be allowed.

  3. I’m not worried about Chaplin, but I do think you should let us subscribe to your blog. Back in the day when you had to pay for your periodicals, you got to vote on quality. I could cancel The New Republic, say, when they ran to much dreck by Naomi Wolf. And I could pay for The New Yorker when I realized how much I missed its snarky bits. You provide a blog that lets all of us (those of us who are struggling in the new economy) know that this is not our fault. And you set an example of grace under pressure. Put up a pay pal button and let us pay for what we read.

    • Thanks all for the offer of cash – via PayPal and otherwise. It is appreciated and confirms that not everyone assumes the unemployed are lazy and feckless. I write, though, as one of 2.6m in the UK. One of many, many millions globally. I do so to share honestly and openly my experience of being unemployed, to fight stereotypes and to dispel myths as more of us face joblessness.
      The kind offers are appreciated but I’m going to say no. I don’t want to ask people in the same situation as me to part with cash and I don’t want to be restricted (or offended by adverts) or to sell what I am writing here.
      Like many, many others I’ll have to get on with it, wear my clothes in bed, eat what is available rather than what I want, fight against money-grubbing banks, stand up to corrupt unemployment agencies and battle against a government determined to see workers on their knees … oh, and put whiskey in my Vimto but I might be one of the few doing that.

  4. You should seriously change your bank, try getting an HSBC personal account.

    I’ve been unemployed for well over a year now and never had a problem with them about it, there’s been times when I’ve been overdrawn for days or even a week and they’ve not minded or charged me any kind of fee, just asked that i put some more money in when I’ve got some.

    They’re also the only bank I know of that didn’t take any kind of bail out and that has continued to remain in profit throughout the recession.

  5. i have been a single parent on benefits on and off for 7 years, the last time i went back to work the job center told me i would be £50 a week better off it worked out after all bills and rent that i was now £150 a week worse off, but i have had issues with banks for years so far the cheapest i have come across is lloyds tsb they dont charge anything if you go over drawn under £10 but have you thought a bout a post office account or a credit union account you cant go over drawn on them, ok so you cant do any D/D’s but no charges, if you are private rented with a C.U.A. you can set up a payment to go straight to your landlord each month when you get your L.H.A. in the mean time if you are private rented and your rent is more than what you get Lha, then go to the council and ask for a decessionary housing payment, it lasts up to 6 months at a time.
    i would suggest to you for the forcible future request your benefit payments to be made to you by giro and sort your self out with a new account, have your money transferred in to the new account, if your bank account is over drawn, go in branch and request to close it as long as the balance is clear before charges are issued they will be happy to close the account with out chasing you for the interest or charges payment. i did this back in 2006 i still owe Natwest £1000 in interest and charges they are no longer chasing me and never have done since i paid the balance and closed the account.
    as for your gas and electric get in touch with British gas energy trust they can help you write off any debt you might have with any suppliers and help you get back in to credit.

    i hope you find some of this information useful and i wish you all the best luck in sorting things out, it takes the piss how much banks charge for going over drawn these days.

  6. im in a predicament i got overdrawn by a sellers fee to the tune of 50p that santander charged me 25 quid plus 10 quid per day until rectified so as a carer for my daughter when my 49.50 was meant to go into my account it didn’t and got overdrawn again because of santander taking their fees to pay the initial fee . vicious cycle with no way out ! i was considering making a paypal deposit ”somewhere” that would purposely overdraw me that i know if the deposit is successful i would be able to get hold of the cash within a few hours .dishonest and prolonging the fees to pay fees but may aswell be for 500 quid as 50p …change my account for future payments to go into … i know of a way using a payday loan company if in dire needs that bypasses the automatic payback date that would normally overdraw you ! but if you change 1 thing they cant take a penny on repayment date
    dispicable i know but hey 2500% apr is aswell

  7. i got shown a letter in the job center that clearely stated a section in law that i took in and said no bank can take money off your bennefit as it is classed as you living allowence even if you are overdrawn you go in and tell them it is illegal to take the money and that you request to see the bank manager immediatly or you will take them to court they soon change there mind and dont take the money trust me it worked with nationwide any other income they can take it off benefits while no working is a nono pu t them straight they see us a weak and not bothering to go to all the effort to stop them it is against the law for them to take your benefit end of

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