Switching banks, effect on credit rating?

Southend1

Hi

I recently switched banks and some companies have been slow to update their records. E.g my utility provider hasn't taken payments in August or September. I phoned today and they said they will take a payment in October, but will this be affecting my credit rating? I'm not sure if they will be reporting this as missed/late payments. The same happened with virgin media, the local newspaper and my union subs.

Thanks for any advice.

innovate

Southend1 wrote: »

Hi

I recently switched banks and some companies have been slow to update their records. E.g my utility provider hasn't taken payments in August or September. I phoned today and they said they will take a payment in October, but will this be affecting my credit rating? I'm not sure if they will be reporting this as missed/late payments. The same happened with virgin media, the local newspaper and my union subs.

Thanks for any advice.

Why did your utility provider not take August and September payments? Why did Virgin, your local newspaper and your union not take the subs that were due?

Did you not notify them about the change of bank account? Did you use your new bank's switching service? If so, did they notify you of any outstanding issues?

Why did your service providers stop taking payments from your old account? Did they try to take the payment, and did the payments fail? Do you have any failed payment charges on your old account? Did you get any letters from the service providers about failed payments? Have any of them notified you that your service will be terminated?

Are all your payments on Direct Debits?

Gromitt

Companies can be slow, but it doesn't normally affect your credit rating as the bill will still be paid, just from your previous bank account rather than the one you have moved to. Of course, you will have left sufficient funds in your old account to ensure bills are still paid whilst you switch, so it shouldn't be a problem.

Southend1

I used the switching service offered by my new bank. Oddly the gas and electric were the first DDs to be set up on the new account yet payments were not taken. The payments have not been taken from the old bank. The newspaper and Unison both said they were just slow in updating records and have taken double payments this month. Virgin charged a £10 late payment fee even though they had the new bank details but waived this when I spoke to them and took a card payment over the phone for last month. I had a letter from the bank advising me that the water company had not set up a DD so I phoned them and they set up the DD over the phone but did not take a payment so I am technically a month behind.

innovate

OK, sounds like your new bank hasn't done a proper job. If I were you, I would ask them to confirm that all payments have been properly transferred and everything has been properly paid (apart from the water company one which they failed to transfer), and - crucially - that your credit records will not be adversely affected by the change.

Also tell them that you

1. are alarmed that their switching service didn't work as advertised (assuming they said they'd do it all for you)
2. are less than pleased that you had to do the water company one yourself, and that you now had to spend time and effort to make sure your credit files are not affected by the move
3. will look to them to correct any wrong credit file records with urgency, and that you hold them responsible for any effects of any bad credit records resulting from the badly administered switching activities

Southend1

innovate wrote: »

OK, sounds like your new bank hasn't done a proper job. If I were you, I would ask them to confirm that all payments have been properly transferred and everything has been properly paid (apart from the water company one which they failed to transfer), and - crucially - that your credit records will not be adversely affected by the change.

Also tell them that you are

1. alarmed that their switching service didn't work as advertised (assuming they said they'd do it all for you)
2. less than pleased that you had to do the water company one yourself, and that you now had to spend time and effort to make sure your credit files are not affected by the move

The thing is, it seems that all (except possibly the water co) were advised by the bank of the new details but some were extremely slow to set up the new payments once given them. Others were no problem e.g. Mortgage co, mobile phone. I knew switching wouldn't be as simple as the banks make it out to be!

innovate

Southend1 wrote: »

The thing is, it seems that all (except possibly the water co) were advised by the bank of the new details but some were extremely slow to set up the new payments once given them. Others were no problem e.g. Mortgage co, mobile phone. I knew switching wouldn't be as simple as the banks make it out to be!

It is still the banks responsibility (once they have offered to do the job) to confirm that the DD for each of the companies is set up against the new bank account before the DD is cancelled on the old account. It's a very simple, if somehow time-consuming process.

Nobody forces the banks to do it, but they do offer the service, and therefore are responsible for it. They do have a good excuse, though - - they have no legal obligation to complete the switches. Morally, however, they do have an obligation since they are advertising switching services.

The banking industry do actually acknowledge that they need to improve their performance for switching services, and there's a plan they will have it all sorted by this time next year. I would argue that if they want to be perfect in a year's time, they should be sorting individual issues like yours now. http://www.paymentscouncil.org.uk/current_projects/account_switching/

As an aside: the last thing on your mind right now is probably changing bank account again - but

1. why not tell your new bank that you will leave if they don't sort everything fully within the next 30 days (incl absolutely no black marks on your credit files)
2. why not set up another bank account as a backup yourself. There is nothing that says you can only have one current account. There are numerous reasons for having more than one current account - - e.g. the recent Natwest/RBS debacle that left many people high and dry for money for weeks. If required, you can very easily transfer some or all of your DDs and SOs yourself

Southend1

Thanks innovate. What I don't understand is that the DDs were set up, I could see them on online banking and the bank obviously thought they were too because when they wrote to me they only pointed out the water co as not having updated their records. And the companies admit to having the new details, they just weren't requesting payments. So I would imagine that if I complain to the bank they will say they had advised all the companies of my switch and that it is individual companies who didn't act on the info in a timely manner who were the problem. If this is the case, where does that leave me in terms of credit score? I'm not even sure whether things like trade unions or cable tv companies report this info to credit reference agencies or if it's only mortgage companies and mobile phone operators that do this. E.g. Is a gas budget account a form of credit or is it just a way of paying a bill by installments which would normally be charged quarterly in arrears?

Southend1

Bump for the daytime people. Can anyone else offer any thoughts/advice?

Thanks

dalesrider

innovate wrote: »

The banking industry do actually acknowledge that they need to improve their performance for switching services, and there's a plan they will have it all sorted by this time next year. I would argue that if they want to be perfect in a year's time, they should be sorting individual issues like yours now. http://www.paymentscouncil.org.uk/current_projects/account_switching/

But in this instance the problem is not the bank.... Its the companies who have failed, to use the new details to take payments.

Its a strange world where someone who does something right gets blamed for failures out of their control.

Perhaps its time for a body that can punish companies in the same fashion ( large fines) that the FSA does to banks where there is a service failure.

Southend1

dalesrider wrote: »

But in this instance the problem is not the bank.... Its the companies who have failed, to use the new details to take payments.

Its a strange world where someone who does something right gets blamed for failures out of their control.

Perhaps its time for a body that can punish companies in the same fashion ( large fines) that the FSA does to banks where there is a service failure.

Good idea dalesrider. I think you're right it's the companies not the bank. As long as they don't report it as late payments I don't mind the delays. Virgin did annoy me though as they tried to charge me £10 late payment fee when it was their failure to request the money, not my failure to pay!