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Joshua, Lawyer
Category: Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I am in receipt of a letter from my bank informing me i have

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I am in receipt of a letter from my bank informing me i have a PPI refund of £2500 which they say they will deduct from an existing debt i have with this bank.
Can they and are they allowed to do this , or should they credit it to my current account with my present bank.(which is different from the existing debt one)
Thanks for your question. Please kindly RATE my answer when you are satisfied

  1. Could you confirm you are neither bankrupt nor in any form of IVA or similar debt management plan please?
  2. Do you accept that you owe the bank a debt?
Customer: replied 5 years ago.

I am not bankrupt,

I am in a Debt Management plan with "PAY PLAN"


Yes I accept I owe the bank a debt , and which I am paying

Thanks. Is the Debt Management plan an IVA arrangement or simply an informal arrangement where they help with your debt payments please?
Customer: replied 5 years ago.

informal arrangement where they help

Thanks. on that basis, unfortunately it is a term and condition of your agreement with the bank that they may use any monies held by them in your name against any debts that the bank holds for you as creditor.

What this means is that they can unfortunately do exactly as they propose whereby any money held in your current account and indeed the payout you are due to receive your claim can be allocated against any debts you hold with the bank.

the reason I asked if you were regrettable in a IVA is that if this were the case, the bank would need to share the claim payout with other creditors potentially as well rather than just keeping themselves though this would not change the net result from your point of view.

I'm sorry this was not particularly positive news

Does the above answer all your questions or is there anything I can clarify or help with any further?
Customer: replied 5 years ago.


Iam no longer with that bank, and my current account was closed with them 4 years ago.

DO you have any debts with them at all? Have they explained what the debt they refer to is? Conisder that it could be with another bank that is part of the same group - e.g. if the bank were Lloyds it could be Halifax and so on?
Customer: replied 5 years ago.

HSBC have passed it on to a debt collector "Metropolitan Collection


I dont have the lettter to hand at the moment re what debt they refer to.


I am about to be travelling for an hour and half and will be unavailable during this period. I will be available again after around 7 PM should you wish to revert to me on any point but in the hope that the following assists in the meantime,:

Whilst the above is true whereby the bank can offset the claim against any debt it is owed, equally, it cannot simply indent debts and must substantiate to your reasonable satisfaction any debt that they claim you owe. The debt you either them or any other financial institution within the group which could include credit cards and indeed any other financial institution the bank owns.

If they cannot substantiate the debt they claim they wish to offset the claim against however the proposal would not be lawful and you would be entitled to challenge the same.

if you are unsatisfied with the response that makes two enquiries you can submit a formal complaint and from there, refer the matter to the financial ombudsman free of charge you have the power to make a determination which is binding upon the bank but not on you.

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me.
Joshua and other Law Specialists are ready to help you
Customer: replied 5 years ago.

Thank you

I will now review the letter from HSBC and clarify which debt they refering to and may need to ask another question

thanks again for help.

Thanks for the feedback. Do let me know if I can assist any further.