www.iva.co.uk

Not sure if anyone has heard of this but thought I would post as a warning to all.

I'm currently in the process of my IVA and my biggest creditor is Lloyds TSB. As advised by my IP, I have stopped paying my payments and as expected am now getting the usual calls from my creditors. However, Lloyds TSB have just taken an interesting new twist.

As I won't speak to them (they keep asking me to ID myself when they call, I won't give it as they've called me, loop for a while, then a terminated call), they have just taken the outstanding loan payment from an overdraft on a joint account. Note, this isn't from credit monies, this is from an overdraft, putting my wife overdrawn for money that she is now jointly liable for!!!

I have removed all joint overdrafts (except for what is outstanding) to ensure that this can't happen again, but this is a nasty, sneaky turn of events.

I have since phoned them and informed them that they are breaching the banking code by creating a joint debt from a single debt and (allegedly) the money is being refunded into the account, but I am as yet confident this will actually happen.

Hopefully this will warn others to sort this situation before the banks attempt this tactic.

HSBC did this to me all the time. Took out the loan payment and then paid it back again and charged me for the fact that there wasn't enough money in the account!

Made no difference what I told them, and a lot of banks do this.

As it is all covered by the IVA anyway I just let it go.

I expect I will get this soon then, we have a joint account with LTSB, but no longer have anything paid into it and have cancelled any dd's on the account, I now expect they will take a loan payment out (even though I cancelled that DD) and take the account over the planned OD, oh joy more charges !
We are just waiting for some paper work to arrive so I can forward to Melanie's team and hopefully get things moving along.
I wonder how long till they realise they are paying there self from an account with no money?

As long as it takes - ours did it for months!

At least all the charges etc are taken into account in the IVA so the only ones who will lose out will be the bank.

You will probably find that in the small print of your banking contract that this gives them the right to do exactly what they have done - this has just happened to a client of mine as well, and is relatively common I am afraid.

For those that are planning to, you can't include it in your IVA, it is a debt that is a joint and several liability and therefore unless your partner is also included in the IVA then they become fully liable for the new debt incurred.

However, as I suspected (from working for Lloyds TSB and Barclays in past lives), it is also highly illegal (in consumer credit terms) as you cannot force a debt onto someone without either a) they sign for that debt or b) a court order imposes that debt.

I have been on to Lloyds TSB stating I would be calling the OFT and asking for their Consumer Credit Licence to be revoked after their clear breach and low and behold the money has since been returned to the joint account, and all overdraft have been removed to prevent this from happening again.

Let us know how you get on with your complaint markwebs, as you do raise some very interesting points.

I was with LTSB and this exact thing happened to me. After a period of being very angry about it I took the pragmatic view that the IVA protects both me and my partner (the other half of our joint account).

In my case my partner is not in an IVA and may end up paying the full amount of the overdraft, with subrogation coming into play where she will effectively step into LTSB's shoes in my IVA for the joint overdraft and hopefully receive dividends in due course.

Complaint won; money back in account, all related charges refunded.

They know they have done wrong, but are working on the principle that if only 1 in 100 complains then they will make enough money to claw back some of that IVA money.

It is important that as many people as possible fight back and get this tactic widely publicised so people can arm themselves against it!!!

Good news Mark.