Published in on Wednesday, April 08 2009 by Ideal Debt Solutions
This week, several money experts have appeared on national television with the aim of making people more aware of the potential dangers of ‘setting off’, a process which many individuals across the UK are falling victim to. The simple fact remains that, although many people have been affected by this process, the large majority of British residents do not even know what the term means and this could have serious consequences for those who are struggling to get out of debt. So, what does it mean? Put simply, it is the right which banks have to transfer money from your bank/savings accounts to pay off other debts which are held with them.
These include credit card debts, which are often low on the priority list when it comes to prioritising debts. You may be aware of this if you have read the contract that you have with your bank because they may have inserted a simple term with the aim of increasing transparency. However, unfortunately, banks have an automatic right to use this process, which makes the insertion of a specific term or condition unnecessary for them.
Money experts across the UK are becoming increasingly worried about this trend, because banks do not need to let you know that they have started the process. Although they are obligated to inform you once the process has been completed, they will not tell you that they are considering starting it. They simply move the money out of the respective account. It seems as if this process, which used to be relatively rare, has been increasing in frequency recently and the Citizens Advice Bureau has reported an official rise in its occurrence.
This is awful news for those trying to cope with debt or attempting to stick to debt management plans. Imagine, for example, that you have planned well in advance and saved enough money to pay for heating your home (something which should obviously be a major priority). These good intentions could be destroyed if the money which has been set aside is removed from your account the day before you are due to pay the bill by the bank, which believes that the money would be better suited to paying off credit card debt.