The first snapshot of current account switching activity – the scheme designed to ramp up competition between providers by making it easier for customers to switch accounts – has just been unveiled, and it appears there is early success.
The new guarantee means switching a current account should take just seven working days, rather than up to 30 under the old system.
The Payments Council, which is overseeing the process, has confirmed that 89,000 people successfully changed over their accounts in the first four weeks – or 20 working days – since the Current Account Switch Service was introduced.
Existing outgoing and incoming payments will now automatically be moved over to your new account, and any payments accidentally made to your old account, which will be closed as part of the process, will be automatically redirected to your new one for 13 months.
Your new provider is responsible for managing the new switching process and you will be refunded if anything goes wrong.
At first look, the new switching figures might not look much different from last year (before the rules came in) when 1.2 million people, or around 23,000 consumers a week, changed their accounts.
But the Payments Council says compared with the same period last year, they mark an 11% uplift. Though they add that the figures released so far are a “first glimpse” of how things are going, and the overall success of the scheme won’t be measured until 2015, to give it time to bed in.
No specific target has been set for the number of people switching accounts for the scheme to be termed a success. The general aim is to raise customer awareness that and build confidence in the switching process to help build more competition.
In other words, people should know it is easy to change current accounts if they want to. One of the side-effects expected from scheme could be that your existing bank or building society makes a bigger effort to make sure you are a happy customer, so that you don’t feel the need to switch.
Adrian Kamellard, CEO of the Payments Council, says: “We never expected that every customer tempted to switch would rush out to do so at launch, but this is an encouraging start.”
SO, IF YOU ARE CHANGING CURRENT ACCOUNT PROVIDERS, WHAT SHOULD HAPPEN AND HOW CAN YOU HELP THE PROCESS GO SMOOTHLY?
Firstly, to help avoid any delays, make sure you get your paperwork in order and that the personal details your existing provider holds are up-to-date. Be ready to show your new provider a bank statement with your current address.
Taking your debit card with you will help to start the process off smoothly as your new provider can run security checks. Good customer communication is something that providers have committed to, so if there are any hold-ups, perhaps because your existing address does not match that on the paperwork from your old bank or building society, or if you’ve got married and not updated a change in your surname, your new provider should be communicating well with you to let you know what’s going on. If there is a mis-match in your details, you may be asked to contact your old bank to update the information they hold about you.
When you are updating your details at your old bank, you do not have to tell them you are switching to a new bank unless you want to.
The delivery of your new card and pin number is not part of the switch guarantee. But the Payments Council says providers have made a “key commitment” to make sure customers receive them by the date they want to switch, to help the process go seamlessly.
If anything does go wrong, you’re entitled to a refund of any interest which has been lost, as well as any charges which have been made to either the old or the new current account due to the blunder.
Any compensation which could be handed out on top of this is a matter for your bank or building society to decide on.
But at the very least, you should be put back to the position you were in if no mistakes had occurred.