Why new ‘ring-fencing’ rules mean you may get a new bank account number
In fact, for some the process has already started. It’s all down to new ‘ring-fencing’ rules which the nation’s biggest banks are subject to.
The rules come into force in January 2019, though some banks have opted to get ahead at this early stage. Essentially the idea is that banks need to divide themselves into two separate organisations; one which handles the traditional high street banking services like bank accounts and savings bonds, and the other which deals with their investment activities, which may be a little riskier.
This ‘ring-fencing’ process is designed to protect account holders from another financial crisis – the idea is that if there is another global meltdown or a bank gets into trouble due to its investment activities, normal account holders will have their money entirely protected as it is effectively being held by a separate entity.
These rules only apply to the very biggest banks, those with deposits of more than £25bn. As a result, if you’re banking with a challenger bank, you won’t be affected, nor will you if you hold an account with a building society like Nationwide.
What has this got to do with my account number?
If your bank is affected by the ring fencing rules then you may be sent a new account or sort code number, or even both. It’s because your bank is splitting in two, and with that it may mean new headquarters for its retail banking services. According to the Bank of England around one million account holders will be affected.
If your details are changing, then your bank will notify you. You won’t need to do anything at first in terms of the money you receive into that account, as payments with your old account details will be forwarded onto your new account.
Banks should handle switching over your direct debits and your payslips, but it’s definitely worth keeping an eye on your account in case any rogue payments don’t make it through.
It’s worth double checking that your details have updated with any firms you make regular payments to also, for example any online subscriptions you might have. It may also be a good time to double check you’re not continuing to pay subscriptions to services you no longer need or use.
The fraud risk
The Financial Conduct Authority (FCA) said that whenever changes like this take place, there is a danger of scammers attempting to take advantage, and so it has warned account holders to be on their guard.
These are the steps you should take to ensure you stay safe:
- Do not assume any letters, phone calls, emails or text messages that claim to be from your bank are genuine. If in the slightest doubt, check with your bank using the number on your card or statement
- Do not give out your account or card details or make changes to payments unless you are completely certain you are dealing with someone legitimate
- Do not share your security details, PIN or passwords to anyone. No genuine organisation will ever ask you for these
- Don’t be rushed into making a decision quickly. No genuine organisation will mind waiting if you need time to think.