If my bank has taken money from my account with no notice, is this legal?

I had a bank account that was charged off in 2006 for approximately $750. Another bank bought out this bank in 08/09. I opened a checking account with new bank in 10/09. The bank withdrew the $750 for the charged off account from 2006 today with no notice, when I opened the account (which was after the banks merged) I was not notified of this debt. I would like to know my legal rights as to what if any recourse I can take? They say they can do this under the “Set Off policy”.

Asked on December 15, 2010 under Bankruptcy Law, California


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Generally speaking when one business buys out another business they assume all the rights and liabilities of the business being bought.  That means that they can collect outstanding debt owed to the business being purchased.  Banking is business as well and although they are ruled by their own set of laws on many levels, these basic principles still may apply. I think that the best place for you to contact is your state banking commission and discuss with them what happened. You claim that you had no notice of the 2006 debt.  That could be an issue here that you need to discuss.  Also ask about the statute of limitations in your state for bad debt.  Good luck. 

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