MSE News: Osborne commits to speedier bank account switching

Old_Wrinkly

I don't think Martin's idea of a single 'portable' current account number has been properly thought through.

zerog

Well the rest of the world won't need to do anything, it just thinks UK account numbers are 14 digits long. The SWIFT codes usually include the bank name as well as the sort code.

innovate

Consumerist wrote: »

My understanding of the proposed arrangements is that following an account transfer, the losing bank will, for a period, forward any calls on transferred DDs to the new bank for execution.

I don't see any problem with such an arrangement.

It should mean that customers are no longer faced with the current situation of having to fund two accounts at the same time because DD recipients take differing times to update their account data.

That would work though I wouldn't call "forwarding for a period of time" completion within 7 days.

Consumerist

innovate wrote: »

That would work though I wouldn't call "forwarding for a period of time" completion within 7 days.

As far as the customer is concerned it would be completion in the sense that there would be no requirement to watch both accounts. The fact that a DD recipient might have to wait an extra day or so will be of no consequence to the customer - and it should only happen once.

innovate

Consumerist wrote: »

As far as the customer is concerned it would be completion in the sense that there would be no requirement to watch both accounts. The fact that a DD recipient might have to wait an extra day or so will be of no consequence to the customer - and it should only happen once.

Well may be it should, but I bet it would need to happen a lot more often in some cases, like indefinitely! Unless, of course, the bank writes to the customer and says they couldn't complete the DD switch for xyz, and the customer has to do it themselves.

Example: my local council will not accept requests from banks, requests on the phone, requests by email to change DDs. They pig-headedly insist on a paper form that has to be signed and hand-delivered or sent by snail mail.

Or Amex, who also refused to switch the DD for my credit card on First Direct's request.

Osborne's plan will only work if all organisations who take money by Direct Debit have an enforcable obligation to work hand-in-glove with the banks on DD changes.

rb10

WestonDave wrote: »

Portable bank numbers would require the whole banking system to be reinvented, not just in this country but internationally - it simply isn't going to happen.

Your account number itself is probably duplicated a number of times within other banks - what makes it unique to you is the combination of that 8 digit number (unless you have an old Lloyds 7 digit one!) and the sort code which identifies the bank and branch controlling the account. So my 40-07-18 12345678 can be separated from someoone elses 20-25-90 12345678. Making my number portable under the current system backfires either way of doing it - if I move just my account number to the other bank the numbers clash (especially if you move to a bank like First Direct which has relatively few sort codes) and if I move both we end up losing the sort code system which tells people working in the system where to contact if there is a problem. (It also works internationally as the two are combined to produce IBAN numbers etc). If you start shuffling it so old HSBC codes are moved to Lloyds etc, that whole end of the system starts to fall apart - in theory that can be overcome by having a new central database to relate them back to their holding banks but its infrastructure to fix something which largely isn't broken.

I say isn't broken because if you choose a decent bank in the first place like First Direct, moving accounts isn't a problem - you just don't need to!

No - the proposal of portable account numbers is that, if you switch your bank account 40-01-02 12345678 to a Lloyds TSB account, then you retain the same sort code and account number, it's just attached to your Lloyds account instead of your HSBC account. So there's no clash in numbering.

Instead of just your sort code referring to the bank holding your account, it becomes the combination of sort code and account number.

Such a system already exists in the UK, but is currently only used on a very small scale.

dalesrider

Old_Wrinkly wrote: »

I don't think Martin's idea of a single 'portable' current account number has been properly thought through.

Its a crazy idea..

I'm in the process of switching from Halifax to Santander. But I'm still keeping the halifax account open.
So how is a portable account number going to work in my case?

To manage things like moving sort codes from one bank to another will require a massive rework of every banks internal systems.
Who is going to stand the bill for that one?

Interesting to also note on the Beeb breakfast show they were saying Osborne wants to speed up money transfers between accounts from the days it takes now to something faster...

He added the Government will also "bring forward detailed proposals to open up the payment systems". In other words, this would allow customers and businesses to transfer money quicker.

Someone is seriously out of touch. Including the presenters who did not seem to know about faster payments. Would also seem that the editors of the above linked piece have missed something that has been in place for at least a year now...:rotfl:

dalesrider

Osborne also said the Government wants to give consumers more choice by making it easier for new banks to enter the market and to challenge existing providers.

So we end up with a banking system like america where banks failing is a weekly occurrence.

Wonder how the Gov will feel when they are having to refund people funds lost under the FSCS backing.


New banks fine.

But for gods sake ensure that they have the backing to ensure that they will be still be around in years to come.
More banks = less customers to be shared around. Which then leads to increased risk to smaller banks. As to attract customers the yneed to offers deals that are pushing limits and risks.

Competition is not always a good thing. Just ask the staff from Comet, Jessops etc who have all lost their jobs...

Anthorn

innovate wrote: »

Not that I want to defend banks, but how can they be made responsible for switching direct debits within 7 days?

Direct debits are authorisations given by account holders to companies such as utilities and insurance firms. Should be interesting to see how banks will convince all those companies, as well as local councils, that they now have to dance to the tune of banks.

Good luck to them, and good luck to the folks who need a switcher service.

Exactly!

Switching bank accounts has been available for donkeys years and has always been operated efficiently by the banks. Santander even give a cash incentive in the form of free overdraft to people who use their switching service.

The problem lies within companies who fail to amend their records and change their DD requests over to the new bank.

So now presumably if companies fail to amend their records within 7 days the banks will be held responsible. Ridiculous!

pinkdalek

Direct debits - don't organisations need at least 10 days (under the guarantee scheme) when any amendments are made.

God help the DWP/Pension departments then, takes them an eternity to amend customers credits now even though they are notified by the relevant bank 3/4 weeks earlier!

George Osborne should focus on promising his own failures before making yet more false promises.