What your bank should do if you have a joint account and you split up – and why they may not

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If you and your partner have a joint account with an overdraft, a joint loan — or even a joint savings account — beware! Your bank may not do what it’s supposed to when you and your partner split up. I get regular emails and comments from women who’ve broken up with their partner and whose bank hasn’t been helpful — or worse — when they’ve asked what they can do to protect their finances.

What can happen?
I was contacted by Jo, who is splitting up with her husband. While they were married they’d not had debt problems, but Jo’s husband didn’t have a good credit history and had asked Jo to keep her name on the joint account while their finances were being sorted out to improve his.

Overdraft problems
Jo contacted SavvyWoman because her husband had applied for a £10,000 overdraft, without her knowledge, and had run up a debt of £2,700. When she went to her local Halifax branch, she was told there was nothing they could do. A month later she contacted the bank again, after her husband had withdrawn another £900 and, after being told a second time nothing could be done, took out £5,000 herself to stop her husband from using the whole £10,000 overdraft facility.

Halifax froze her account some weeks later and, when she complained, offered her £50 in compensation and waived overdraft charges. Since I contacted Halifax on Jo’s behalf, they’ve increased this offer to £150. I found Jo’s case pretty shocking and think Halifax should not pursue Jo for the £900 that her husband withdrew after she told the bank about the dispute.

What banks should do
Banks should take reasonable steps to help couples manage joint accounts if they are splitting up or if there is a dispute. This means that if you ring your bank or go t the local branch and say you’re in dispute:

  • They should offer to convert the account to one where both of you have to agree any transactions, or
  • They should offer to freeze the account.

SAVVY TIP: Bear in mind that if you freeze an account, both of you have to agree to unfreeze it. That means that if your partner or husband wants to make your life difficult, they can refuse to agree to unfreeze an account and you wouldn’t be able to access any of the money that is in it.

What banks do
Banks’ procedures vary. I’ve contacted their press offices to find out what the banks would do if a couple with a joint account was to split up (called ‘telling the bank there’s a dispute’ in their jargon). It’s worth bearing in mind that even where their policy may seem reasonable, it’s more than possible that staff in the call centre or in the branches may not know the rules.

  • Barclays: If a customer tells the bank there is a dispute, they will be asked if they’d like to convert the account from ‘either to sign’ to ‘both to sign’. All cards and regular payments are cancelled, telephone banking is suspended and online banking withdrawn.
  • Co-operative bank: If we’re told of a dispute, the bank can block or suspend the account so that any subsequent payments or withdrawals would need the authority of both joint account holders. Telephone or internet banking may be suspended.
  • HSBC: If you tell the bank there’s a dispute, the bank may take this as a notice that the account should be changed to ‘both to sign’. If so, internet banking may be suspended.

SAVVY TIP: Unusually, HSBC says that until all the cards are returned, card transactions (including those carried out via self-service machines) will go through the joint account as normal. This is different to most of the other banks who say transactions shouldn’t go through once you’ve told them about the dispute.

  • Lloyds Banking Group (includes Lloyds, Halifax, Bank of Scotland): If you tell them you are in dispute you can ask for the account to be frozen or to have transactions approved by both parties. The bank is not allowed to do this automatically.
  • NatWest/RBS: If you tell the bank of a dispute, it will look to get confirmation from you and your partner about how you’d like the account to operate. One partner can ask for the account to be converted to ‘both to sign’. Telephone and online banking would be suspended.
  • Santander: Either party can contact the bank and it will change the joint account so that both parties have to sign for any transactions. Once this has been done, neither you nor your partner will be able to view or make online transactions.

Watch out
If you and your husband or partner are splitting up and you are worried about a joint account:

1. Check that the bank does what it says it will. I’ve spoken to women whose bank hasn’t frozen an account when it’s promised to. Keep a record of phone calls, emails etc.

2. Be aware that both of you have to agree to unfreeze an account. If your partner is unlikely to agree to this, freezing it in the first place may not be the best option.

3. Find out whether changing the way the account operates from ‘either to sign’ to ‘both to sign’ means that telephone and online banking are suspended or withdrawn. If not, find out if/how you can revoke access to them.

4. Make sure that you won’t be held liable for any transactions after you’ve told the bank about the dispute (except for cheques that may have been written but not paid in/cashed). The bank shouldn’t insist that plastic cards are returned before transactions are blocked.

Closing a joint account
Banks will normally only let one person’s name come off the account if they have received confirmation in writing. This can make life difficult if your ex won’t write to the bank. If your bank doesn’t have up to date contact details for him, they may not accept address details from you (due to ‘data protection laws’).

What I’d like the banks to do
I’d like banks to be much clearer about what a couple’s responsibilities are if they take out a joint account, and to make sure their own staff do what they’re supposed to if a relationship breaks down. I’d like banks and building societies to:

1. Give couples much clearer information about what could happen to any debts on a joint account or mortgage when they first sign up.

2. Contact both parties for their explicit agreement if a bank is going to add or increase an overdraft on a joint account or increase the borrowing on a joint mortgage.

3. Let one partner safeguard themselves by changing the joint account so that both have to agree to all future transactions, and for this to be the default option.

4. Make sure all staff are aware of the rules so that consumers aren’t told there is nothing the bank can do, or given incorrect information.

What do you think? Please leave a comment in the box below if you’ve had experience of joint accounts or if you agree that the banks and building societies should do more.

Related articles:

Over half of adults don’t know the rules on joint accounts

Understanding your rights if you have a second credit card on an account

Joint debts: what to do if your relationship breaks down

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