Thousands change banks in first month of new switching service
Nearly 90,000 current account switches have been successfully completed since new “seven day” switching rules were introduced last month.
The Payments Council has confirmed that since the launch of the new Current Account Switch Service on 16 September, 89,000 switches have been successfully made by customers.
Under the service, current account users can switch providers in seven days, with a guarantee that they will be fully protected against any financial loss if a problem occurs during the switch.
Adrian Kamellard, CEO of the Payments Council, which is overseeing the new switching service, said: “Since its launch 89,000 switches have been successfully made by customers using the new simple, reliable and hassle-free account switching service. We never expected that every customer who is tempted to switch would rush out to do so at launch, but this is an encouraging start.
In the same four week period in 2012, there were 80,000 switches made through the old automated service.
Although the industry is positive about the increase in the number of people switching, some suggest the increase may have fallen short of expectations.
Kevin Mountford, head of Banking at MoneySuperMarket said: “The figures released today by the Payments Council are encouraging. It’s great to see 89,000 applications have already been completed, an 11% increase year on year, as people take advantage of the Current Account Switch Service since its launch last month. However expectations across the industry may have been higher.
“It is still early days and the fact that there have been so many successful, uncomplicated switches thus far is a big thumbs up for the industry. I hope this will encourage even more consumers to get up off their laurels and start the current account switching process today.”
David Black, bank specialist at Consumer Intelligence, added: “Historically switching levels have been low so any increase can be viewed as positive.
“There will be another advertising blitz in the New Year. The real way to judge the success of the new scheme will be to see if switching levels continue at the new higher levels.”
Here are the top 5 questions that were asked by consumers looking to switch their current account provider:
– My new bank says I need to update my details with my old bank. Do I? Why?
If the details you provide to your new bank do not match the details held by your old bank then you may be asked to contact your old bank to update the details they hold about you. Examples include if you have got married and not changed your maiden name to your married name, or if you have moved house and not told your old bank your new address. When you are updating your details at your old bank you do not have to tell them that you will be switching to a new bank.
– Do you have to close your old account as part of the Current Account Switch Service?
Yes. Closure of the old account is part of the Current Account Switch Service process. This allows any payments made to your old account to be automatically redirected to your new account. You can switch and keep the old account open if you want to, but you won’t be able to use the Current Account Switch Service – so you won’t benefit from the Current Account Switch Guarantee.
– What should I do if my bank doesn’t meet the seven working day guarantee? Will I get any compensation?
If anything goes wrong with your switch then your new bank will refund you any interest (paid or lost) and charges made on either the old account or the new account. Whether you receive compensation above and beyond this is a customer-service issue for your particular bank to decide on.
– Are account opening and account switching all part of the same process?
Account opening and account switching are separate processes. Your new bank or building society has to carry out ‘know your customer’ security checks as part of their account opening process. Once these are complete to the satisfaction of the new bank or building society, you can choose and agree your switch date.
– Will I receive my new debit card and PIN before my switch date?
Although delivery of the card and PIN is part of the account opening process, and therefore not in the Current Account Switch Guarantee, it is a key commitment for the new bank or building society to make sure new customers receive their new card and PIN by their chosen switch date. This is to ensure a seamless continuity of service from the old bank to the new bank.