I am a director of four companies. Our bank has consistently transferred funds from the highest turnover company account into the accounts that are overdrawn. Is this legal?
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It depends on the common ownership of the accounts, but generally, yes. This is in your deposit agreement and is called the right to setoff. It means that if there is money owed the bank in one account (the overdrawn account), they can get those funds from an account with a positive balance, and it is not necessary that all of the owners be the same.
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It depends on the common ownership of the accounts, but generally, yes. This is in your deposit agreement and is called the right to setoff. It means that if there is money owed the bank in one account (the overdrawn account), they can get those funds from an account with a positive balance, and it is not necessary that all of the owners be the same. 