Santander could be about to tuck into your savings if you owe any money to the Spanish banking giant, or any of its subsidiaries. According to ThisIsMoney, anyone who has savings or current accounts held with Alliance & Leicester, and debts owing to Abbey, will see Santander use that cash to clear the arrears. It will also work in reverse; those saving with Abbey but owing to Alliance & Leicester will see the same fate.

Alliance & Leicester and Santander-owned Abbey bank will formally merge at the end of May, putting Santander in charge of all the accounts held with either bank. Santander can then legally exercise its right to use customers’ cash to clear overdue monies; this is known as ‘set-off’.

Marc Gander, speaking on behalf of the Consumer Action Group, said: “This is grossly unfair. Banks seem to be able to change the terms of the agreements they have with customers when they see fit.”

“People will have opened a savings account with one of these brands in the knowledge their money was safe. Now, if they have a debt at what was a completely different bank this money will be used to pay it off.”

In addition, any accounts with Santander-owned online bank Cahoot will be included in the move. Those who could be affected now have three months to get their finances with these banks up to date and in order, before the move by Santander will come into effect.

Nothing can happen until the High Court approves the formal merger of Abbey and Alliance & Leicester, but this is likely to be a formality.

This entry was posted on Wednesday, April 7th, 2010 at 10:08 am and is filed under Banking, Savings. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.