Switching bank accounts: direct debits may fail

Legacy_user

When you switch banks, the automated process offered by BACS for transferring direct debits is sloppy.
BACS's account of it is here:
http://www.bacs.co.uk/Bacs/Banks/BacsServices/Accountswitching/Pages/TransferOfDirectDebitsAndStandingOrderService.aspx
In practice, it can go wrong if BACS notifies an organisation you pay by DD of your Newbank details at a time when this organisation is due to collect a payment in the next week or so. What the organisation should do is collect this imminent payment from your Oldbank (which you therefore need to keep in sufficient credit), meanwhile set up the Direct Debit Instruction with Newbank, and then collect the next payment from Newbank. What they in practice may, in error, do is set up the DDI with Newbank and try to take the imminent payment straight away.
If the organisation sets up the DD with Newbank so that it appears in your Direct Debit list on (say) a Monday, they cannot take the first payment from Newbank until Wednesday, at the earliest. If they try to take it on Tuesday, Newbank may appear to pay it, but will then reverse it. The organisation will then compound its error by attempting to sting you for 'bounced direct debit' and late fees.
On the other hand, to be fair to direct debit initiators, the BACS "efficiency guide" does not explain this gestation period for a switched Direct Debit Instruction.
http://www.bacs.co.uk/Bacs/SiteCollectionDocuments/Account_switching_efficiency_guide.pdf

pmduk

I've always found it more efficient take control of the process myself. I notify each direct debit company and stress that I want to know the date that they will take the first payment. Then I ensure that the previous mandate is cancelled. It's always worked for me.

[Deleted User]

pmduk wrote: »

I've always found it more efficient take control of the process myself. I notify each direct debit company and stress that I want to know the date that they will take the first payment. Then I ensure that the previous mandate is cancelled. It's always worked for me.

I find it more quicker to do this way and at least the company knows directly

System

pmduk wrote: »

I've always found it more efficient take control of the process myself.

So have I. (Though it can take a lot of time and care.) However, it is often a condition of inducements to switch current accounts that you use the (sloppy) BACS automated switching service.

doelani

pmduk wrote: »

I've always found it more efficient take control of the process myself. I notify each direct debit company and stress that I want to know the date that they will take the first payment. Then I ensure that the previous mandate is cancelled. It's always worked for me.

Same here, I used to work in " switching " department for a bank and it was a nightmare. I have changed banks 4 times in last 12 years and always transferred direct debits mysel, just done them over a month and after each was paid so ran 2 accounts for a month until all confirmed.

davethorp

I've recently used the switching service to bring my direct debits over from natwest to Lloyds TSB. Most transferred over without a problem. I have to manually provide details to 3 of them though of those 3 one of the companies had changed my account reference with them and set up a new direct debit with the new reference on my old account during my switching period which is why that didn't transfer. Don't know why the other two didn't transfer over.

I had 4 direct debits that were supposed to go out on or near my switching date that failed to go out. They eventually took payment for them 2 days ago after which I assume they will be back onto their normal cycle

All in all though I found the process pretty smooth and a lot less hassle to manually sort out the 3 DD's that failed to transfer than ring every single company myself and change all my direct debits manually.