Wednesday 29 January 2020

Charlie Weston: Second bank admits dipping into savings of its customers

Charlie Weston Personal Finance Editor

Bank of Ireland has become the second bank to admit that it dips into consumers' savings accounts in certain circumstances if payments are missed on loans or hire-purchase repayments.

AIB admitted to this newspaper recently that it engages in offsetting, or taking money from consumers' savings accounts when the consumer does not pay a loan. Other banks are known to do it, but haven't admitted the practice.

Bank of Ireland had initially denied to the Irish Independent that it engaged in offsetting.

But it has since admitted that the terms and conditions in its accounts, other than mortgage accounts, allow it to "offset outstanding balances against other accounts".

The bank said it would take money from a consumer's savings accounts to make credit card or loan repayments.

A spokeswoman said: "This is only used in extreme circumstances and would only be done by Bank of Ireland at the end of the collection cycle (after 150 days), as a last resort, where the customer has not responded to numerous contact appeals to make new arrangements."

The bank said "offsets" were not done as part of the normal collections procedures.

The spokeswoman added: "We would never offset funds until all avenues of collection are exhausted and when it is done notice is always given to the customer.

"During this notice period, no block is placed on the customers' accounts and they have the right to withdraw their funds in full. Most cases involve the offset of small, dormant credit balances (less than €10)."

Bank of Ireland said offsets were not carried out on accounts where a customer had advised it that that they were experiencing financial difficulties.

"Nor are funds taken from active current accounts where people have wages/benefits mandated that are used for day-to-day expenses," the spokeswoman added.

James Doorley, chairman of the Consumers' Association of Ireland, called for the practice to stop, adding: "This is high-handed and raises questions from a legal and moral point of view."

Irish Independent

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