The Money Saving Expert founder issued the alert on his latest podcast show
Martin Lewis has issued a word of warning to anyone with a joint bank account. The alert was aired during today’s episode of The Martin Lewis Podcast, titled ‘Question Time: How to escape a joint account? When not to claim child benefit? Who is Martin’s successor?’ (Monday, February 9).
During the episode, Martin Lewis answered listeners’ questions about joint accounts. He suggested that if a relationship ends, people can freeze a joint account to stop any withdrawals. You can check out the complete episode on BBC Sounds.
In a warning to anyone with a joint account, or thinking of setting one up, the Money Saving Expert founder said: “Only have joint accounts with someone you absolutely trust, and who is there for the long-term.” He added: “If it’s not going to happen, then get yourself out of it before you’re splitting up.”
His warning came in response to a question sent in by a listener, who said: “I have a question on behalf of a friend of my wife, she the friend split from her longtime partner. Recently, they had separate bank accounts, but a joint account for bills, which had an overdraft facility.
“The account was at zero but hadn’t been closed and was still registered to the house that they shared, where she still lives recently. She’s noticed that the account has gone overdrawn with her spending money on his debit card. She repaid this, but before she could close the account or get herself removed, he spent more money to the extent that she doesn’t have enough money to clear it.
“What can she do about this as the overdraft is obviously costing her per day. Can she get the back to stop any future transactions from his card? She’s panicking over this and initially, the bank said there was nothing they could do as he has the right to use the account. However, it’s quite clear he isn’t going to contribute any money towards clearing the overdraft.”
Responding to the question, Martin Lewis admitted it wasn’t the first time he had heard a scenario like this, describing the situation as “difficult”. He continued: “This has really serious repercussions on people, especially if they can’t talk to their ex-partner now, the actual rule is it depends on the bank account.
“I’m afraid to say some banks will allow one person to close a joint account, but then typically that’s where it is a one-to-sign joint account, while others require you both to complete a full form and submit it. So the simplest thing is if there is still an amicable relationship or at least a cordial relationship between your friend and her ex-partner that they should have the conversation. And they should agree some formula and agree to close the account together. I’m suspecting from the way that you’ve written this, that is not going to happen.”
Martin explained that people can usually remove themselves from a joint account without permission from the other party; however, that only applies if the account is in credit. He said: “The strongest thing that she could ask to do at this point, you’re not going to like this and I find it uncomfortable that haven’t got a better solution, is that she could ask for the account to be frozen.”
The financial expert said that although that wouldn’t deal with the existing debt, it should stop more transactions. He also recommended the woman call up the bank again, saying: “Tell them that she’s feeling vulnerable in this situation because she’s disempowered from her finances and doesn’t know what to do, and would like to know if they have someone she could talk to about her options to try and extracaate herself from this situation, which is not a good one and what her rights are if she feels she isn’t being dealt with adequately and she’s notified the bank. Then I’d do it as a formal complaint.”
Martin stressed that he didn’t like what he was saying as it is “not a solution”, but continued: “She needs to make a formal complaint and then take them to the ombudsman – that they have not followed the consumer duty, that debt is being run up in her name that she’s asked them not to allow it to be run up, and it’s continued to be run up after she has notified them, and I would put it as a consumer duty.”
Concluding the segment, with a warning to fellow listeners, Martin said: “I wish I had a stronger answer. I’m sorry for doing it as a reflective lesson because that really is no help to your friend whatsoever, but the reflective lesson is only have joint accounts with someone you absolutely trust, and is there for the long-term, and if it’s not going to happen, then get yourself out of it before that you’re splitting up.
“And, just as an afterthought, you are hearing me right, subtly, if she feels vulnerable, or the situation is being abused in this context, then being classed like that tends to give the bank more powers to act.” However, Martin then stressed: “Now, clearly I’m not suggesting that anyone pretends they are being abused, abuse is a very wide term. But clearly, her ex-partner is abusing financial trust by spending money and building a debt. I presume she has asked him not to when they shouldn’t be doing so.
“So the definitions are pretty difficult here, but I think it is a problem that we have with joint bank accounts for me. It seems that you should have a unilateral right to close down a joint bank account, or at least remove yourself from the joint bank account, because, in these types of eventualities, that doesn’t mean that you aggregate responsibility for debts built up before you did so, because that’s the nature of a joint. Bank account, but there should be a point where you could say, I don’t want to be linked with this person in a bank anymore.
“And that should stop and that you should have a right. But as far as I’m aware, you don’t have a right. Although the argument on this is that consumer duty that you know have that you could argue under the consumer duty, potentially, they should do it. But that’s a tough one to find. On the back of that question, I’m going to speak to the economic abuse charity to see if they’ve got anything that I don’t have, and I will cover it in a future week.”
