COMMENT
When You Can't Bank On Coupledom

Last year a friend of mine had a bit of a problem with her former long-term boyfriend. In spite of the break-up of their relationship, he'd been continuing to help himself to money from their joint bank account. What to do?

Not surprisingly, as it was a joint account, she was worried that she would be liable for any debts he was running up and didn't know how to stop him from using the account. Her bank couldn't help because she'd signed a mandate agreeing to joint liability and as she wasn't on speaking terms with her ex, she wasn't sure how to resolve the situation.

Although joint liability is an accepted part of holding a joint account, the Financial Ombudsman has been known to intervene if the bank has exacerbated any difficulties when one party is trying to close the account.

For example, one couple had signed a mandate agreeing to be 'jointly and individually' liable for any overdraft, and the mandate could not be cancelled unless both cheque guarantee cards were returned. When they fell out, the ex-girlfriend wrote to the bank asking them to freeze the account while he carried on writing cheques that the bank was obliged to honour because of the guarantee provided by the card. Both she and the bank were between a rock and a hard place.

Unfortunately for the bank, they slipped up when they automatically issued a replacement card when the original expired. In the Ombudsmans' view, the bank had not taken reasonable steps to reduce the girl's liability to a minimum so, while she was legally accountable for debts run up using the original card, she was not liable for those he had amassed using the replacement card.

The point to note therefore is that while account holders continue to be individually responsible for all debts run up on a joint account, good industry practice requires that the bank should also take reasonable steps to minimise problems when they know about them.

As for my friend, she was fortunate in that her ex-boyfriend's mother managed to shame her son into returning the card and agreeing to close the account. Some people aren't so lucky.

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