BANK bosses grabbed more than £500 in overdraft charges from a distraught customer - two years after she told them to close her account.

The TSB has launched an inquiry into why Alexandra Lodge was hounded for money, despite being told the account she shared with a friend was in credit when it was shut down in 1994.

She accused bank officials of theft and referred her case to the Banking Ombudsman after they took the cash from another account she held with them.

The bank has now apologised and offered Alexandra £150 compensation, after her case was taken up by the Lancashire Evening Telegraph.

Alexandra, of Lynwood Avenue, Darwen, opened the joint account at her local TSB branch with a friend when they shared a house with another girl. But when the three women moved house Alexandra and her friend went into the bank to close the account.

She claims the clerk told them it was more than £11 in credit and they understood it was closed after they withdrew the money.

The first she knew of the mix-up was six months later when the TSB's head office rang her asking for her new address, despite the fact she had just taken out a mortgage with them.

She then received a letter telling her the old account was more than £300 overdrawn.

Despite repeated attempts to resolve the matter over the next few months, she was then told the debt has risen to more than £400. An official at the Darwen branch even admitted that a bank clerk was at fault for not telling her there were outstanding charges on the account when she tried to close it.

Last week Alexandra was amazed when she tried to draw money from her new account at a Speedbank and the machine took her card away. She later discovered the account had been closed after the disputed charged had been deducted, taking her £486.19 overdrawn.

She said: "As far as I am concerned this is theft. I told head office I was still in dispute over the matter and the man on the other end of the line said 'well we aren't."

"I do not mind paying the bank charges accumulated before I closed the account. I do object to paying the charges after this date."

The bank has now re-opened her latest account and given her back the £57.46 that was in it when it was closed.

A spokesman apologised for the mix-up and added: "When this woman came to close down her account she should have been advised that her account was overdrawn but for some reason she wasn't.

"She believed it was closed when it was still open and accruing charges and we were unable to contact her because she had moved."

"We are very disappointed that our standard of service was not what it should have been. We have made a mistake and there is no point hiding from it."

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.