MSE News: Osborne commits to speedier bank account switching

innovate

I have no doubt that the DD system can be fudged in a way DaveO describes. However, none of this alters the fact that the DD mandate is with the the recipient, not with the banks. Unless the recipient is another bank (tiny number of DDs only), the banks have absolutely zero powers to tell the recipient to change the mandate. So they may have to redirect DD payments for a very long time if not forever - - unless the customer acts and tells the recipient to change the mandate.

The "actually technically very simple" fudge seems to also force people to, effectively, close their old account. It is entirely unsuitable for people who would like to have more than one account, with some DDs on one account and some on the other. Mind you, people wanting to do that have been quite happily doing this for a long time without the fudge.

We shall see how it pans out. The whole thing is a huge, but expensive, storm in a teacup anyway, because those who want to move (fully or partially) have longe been able to do so without any issues, and with very little effort.

Anthorn

Consumerist wrote: »

I don't see that banks will need to "chase up" anything. If a call is made on a transferred DD, the old bank just passes it to the new bank for execution. I don't see that as being "a*se-backwards".

It's not the bank which executes it, it's the payee. Both payee's and payer (payor?) banks merely store the record of the authorisation. What happens during a switch is that the new bank asks the old bank for details of direct debits. When the new bank receives them it stores the records and then contacts the companies and asks them to change their records and send their DD demand to the new bank. Pretty simple if the companies do in fact change their records in a timely fashion.

On the subject of splitting up banks and ring-fencing the retail arm, that's just playing to the audience with a bit of over-acting thrown in for good measure. If that's done it will affect the banks' profits because it removes the liquidity of the money they hold: They can't move it to where it's likely to make the most profit: Increase of charges, maybe. Fixed fee bank accounts more likely because charges are already maxed out: It all depends what consumers are willing to accept which won't be a lot more I think.

Hazzanet

innovate wrote: »

However, none of this alters the fact that the DD mandate is with the the recipient, not with the banks. Unless the recipient is another bank (tiny number of DDs only), the banks have absolutely zero powers to tell the recipient to change the mandate.

Strictly speaking, the ADDACS report is the 'authority to debit the new account' and replaces the old mandate. The Direct Debit rules require the service user (payee/recipient) to change their records within 3 working days and set up the new DD Instruction against the new bank.

Sadly, the BACS DD rules are regularly misinterpreted, and when added to poor software development, lax internal processes and general incompetence, the reports are regularly missed or ignored thus not acted upon.

Complaining to BACS about a service user's failure to follow the rules often meets with an overly bureaucratic process where BACS contacts the sponsoring bank, who then contact the service user who returns with some nonsensical response and generally nothing gets done.

roddydogs

Surely, thou at the moment Payments INTO you a/c have to be contacted individually to change, it will change to your new "Bank" being able to do this, wont this be open to abuse/phishing?

Alpine_Star

innovate wrote: »

those who want to move (fully or partially) have longe been able to do so without any issues

This is simply not what the PCA market study found and neither how it is perceived to be.

Consumerist

If there had been no issues with moving bank accounts there would have been no need for these changes in the first place.

If the DD system is not fit for purpose (the customers' purpose, that is) then it is broken and sorely needs to be fixed. Because there is no apparent profit in providing an efficient banking service to customers, the banks don't want to know.

Consumerist

innovate wrote: »

Not that I want to defend banks . . .

Really! Are you sure about that?

innovate

Alpine_Star wrote: »

This is simply not what the PCA market study found and neither how it is perceived to be.

I don't know what the PCA study is you refer to, or by whom it is not perceived to be easy and straight forward.

What I do know is that both myself and a host of other people have moved all or part of their current accounts between banks with no problems for years.

innovate

Consumerist wrote: »

If there had been no issues with moving bank accounts there would have been no need for these changes in the first place.

Ah yes, of course, neither the banks nor the government have ever wasted money on useless projects.

Consumerist wrote: »

If the DD system is not fit for purpose (the customers' purpose, that is) then it is broken and sorely needs to be fixed. Because there is no apparent profit in providing an efficient banking service to customers, the banks don't want to know.

The DD system is perfectly fit for purpose, incl the Direct Debit Guarantee that fully protects the customer's rights.

Consumerist wrote: »

Really! Are you sure about that?

I am indeed.

But no doubt next I will be suspected (wrongly) that I work / have been working / hope to be working for a bank, and therefore having some undefined ulterior motive.

rb10

innovate wrote: »

I don't know what the PCA study is you refer to, or by whom it is not perceived to be easy and straight forward.

What I do know is that both myself and a host of other people have moved all or part of their current accounts between banks with no problems for years.

It's the OFT's review of personal current accounts.

Their research shows that whilst slowly increasing numbers of people are switching banks, there still remains a majority who are too fearful to switch. A more robust DD switching process should help with this. The other half of the problem is helping people to realise that they get nothing at all back from their [e.g. Natwest] account, and could be significantly better off by switching to [e.g. Santander].