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Switching banks? Make sure your old account gets shut down

Tahmina Mannan
Written By:
Tahmina Mannan
Posted:
Updated:
07/05/2013

Consumers switching banks are being urged to check their old accounts are closed down as many banks and building societies fail to do this for new customers.

According to financial research company Defaqto, only 23% of current account providers contact a customer’s existing bank to have their account closed down after they switch banks, while 43% may do so but with various restrictions applied. 

The report found that there is a wide variation between current accounts in terms of the services providers offer when a customer switches to them.

As a result, consumers are being advised that they ensure they are aware of how a receiving bank or building society would manage the switching process when looking for a new current account.

Brian Brown, Defaqto’s head of consulting, said: “Our data shows that there is wide ranging variation between current accounts in terms of the services offered when customers move across from another bank or building society – and this is an important consideration from a customer’s viewpoint if they are keen to experience a hassle free and well managed transfer.”

From September 2013, new legislation will come into force where a bank or building society will be obliged to offer a minimum level of service which includes aiding the customer in closing down their previous account.

The industry is investing £750m in a new account switching service, which will allow consumers to switch current accounts easily and securely in just seven days which will include getting all the fraud checks, and getting the debit cards in time.