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Switching bank accounts to be ‘simpler and hassle-free’
Details of new rules to make switching current accounts easier – due to come into force in September – have been released today.
The Payments Council has launched a Current Account Switch Guarantee and Trustmark, which will be used by all participating financial institutions and provide consumers with details of what they should expect when switching.
The new service aims to increase competition in banking by making it simpler and more hassle-free for customers to switch their current account.
The switching process will be completed within seven working days – a substantial improvement on the current process that can take between 18 and 30 days.
The Guarantee details are:
• The service is free to use
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• The customer can choose and agree the switch date with their new current account provider
• The new current account provider will take care of moving all payments going out (e.g Direct Debits) and those coming in (e.g. salary)
• For 13 months the new current account provider will arrange for payments accidentally made to the old account to be automatically redirected to the new account
• If anything goes wrong with the switch, as soon as it is told the new current account provider will refund any interest and charges made on either a customer’s old or new current account as a result of the failure.
Kevin Mountford, head of banking at MoneySupermarket, said: “The Guarantee and Trustmark will help instil confidence in consumers that they can switch current accounts safely, securely, with the minimum of hassle, and provides reassurance and redress should things go wrong. Although in reality switching is usually relatively straight forward, this move could be a real turning point in improving switching rates in the current account market.
“Although this scheme tackles some of the barriers which currently prevent consumers from switching and will perhaps, for the first time, challenge the notion that people rarely switch current accounts, there is still little innovation from providers in the accounts they provide.
“I would hope that the arrival of new challenger brands such as M&S Bank and the Post Office alongside the new switching scheme will help address this problem and that consumers are given true incentives to change their bank.”