Debts could mean savings accounts ''raided''
30 June 2009
UK banks are taking advantage of a law which enables them to take money out of customers'' personal savings accounts to recover monies owed.
That is according to the Guardian who reported on Sunday (June 28th) that financial institutions are using the practice of ''setting off'' funds to take money from those who are indebted to them during the recession.
The practice is a perfectly legal but little known system by which a bank can take money from one account into another, if it is held at the same company.
Banks have even taken money from benefits, which have left low-income households in danger of failing to find money for basic provisions.
Social policy officer at Citizens Advice, Tony Herbert, told the newspaper: "We''re now seeing hundreds of people suffering, and are worried in particular about seeing benefits being wholly taken by banks from people''s accounts."
The news follows recent revelations published by the Citizens Advice Bureau on June 10th that the number of people seeking advice about debt has rocketed in 2008/9.
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