Customers could be powerless to prevent banks from taking their savings to pay off their debts as banks consider using the set-off rule. The rule is a possibility at the majority of high street banks, though banks owed money may only take funds if the savings account is held with them. The increasing size of Spanish bank Santander makes this more likely, as an increasing number of borrowers have savings accounts with a high street bank who form part of the banking giant. Therefore, those who bank with Abbey, Alliance and Leicester or online banking company Cahoot will need to be wary.
The rule is likely to affect those who are behind on mortgage payments or those who have unpaid overdrafts the most. Those with unpaid credit card or personal loan debt could also be affected. The rule will not come into force until the High Court approves the formal merger of Santander and the high street banks it has acquired, and will not be used apart from in the most extreme circumstances. There will be a three month notice period prior to the enforcement of the set-off rule in which borrowers can get their debt repayments back on schedule.
Banks May Take Savings to Pay Debts
Financial Services > e-banking > Banking news
Banks May Take Savings to Pay Debts
Wed, 07 Apr 2010
Recommended links
Reclaim Bank ChargesTop e-banking providers
Tax Free ISAs
Leading Savings Accounts
Online Banking Guide
Bank Advises Consumers of ISA Advantages
Metro Bank Hopes for London Impact
Private Bank Removes High Interest Savings Account
Bank Reveals Increase in Savings Levels
Government to Withdraw Guarantee on Nationalised Bank Savings
Dutch Bank Reveals Average UK Savings
Central Bank Blamed as Inflation Cancels Out Savings Interest
Government Backed Savings Bank Announces Interest Delay
FSA Authorises Bank as Savings and Mortgage Provider
Banks Upset Over National Savings and Investments Offering Attractive Deals
Bank Savings Survey Reveals Stable Savings Levels
Bank Returns Cheques Following Savings Applications
| Banking news |
|---|
| Banks failing on online fraud says MPs report - Tue, 05 Apr 2011 |
| Lloyds TSB is to change the interest rates on its Vantage current account - Thu, 31 Mar 2011 |
| Contactless debit cards from Lloyds TSB - Tue, 29 Mar 2011 |
| More News |
Simplyhealth Dental Plan
Affordable cover from only £7.50 per month. Join now and get first month FREE
Amex Cash Back
Credit Card
Credit Card
Get 5% cash back on purchases with Amex
Income Protection Insurance
Get an instant quote with the award winning company