MSE News: Faster current account switching is coming – but cards not included

pqrdef

JuicyJesus wrote: »

It's a decent new service. Not perfect, and it probably could never be by its very nature, but a marked improvement on what went before.

It's also the thin end of a wedge. Redirecting credits is a powerful and dangerous facility.

MoneySaverLog

I'd rather sort switching myself rather than rely on the banks to get it right.

pqrdef

pinkdalek wrote: »

Something which is being introduced to make switching easier

But we weren't born yesterday and we know that's not why they're doing it.

Same with Faster Payments. The regulators said, why don't we make the banks drag their technology into the 1980s, and the banks said, how do we make money out of this. They gave up on the idea of charging personal customers - don't think they didn't think about it - but they make businesses pay through the nose, which is why a lot of them stick to 3-day BACS.

They won't make much on switching, though they'll charge business customers. They'll save on costs - bye-bye dedicated switching teams - and switching overdrafts. But mostly they'll appease the government - build a smokescreen that makes it look like they're competing, though that's really the last thing they'll do.

The immediate result will probably be that they recalculate the value of a new customer, on the premise that he'll be off down the road at the whiff of a Nectar point, and adjust ther customer acquisition budgets accordingly. So the incentives will shrivel until they work out new ways to keep customers loyal.

The government made it easier for us to switch energy and comms - that's why we're all locked into 12/18/24 month contracts now.

The banks may also go for contracts. They'll probably also go for more linkages, like the First Direct regular saver where you lose the rate if you close the current account. I recently "switched" my FD account - won't be doing that again.

So switch your FlexDirect and kiss goodbye to your Flexclusives. Expect to see good deals on credit cards, loans and mortgages for main current account holders, turning into bad deals if you switch.

And then there's Plan B - make out that in the new world of cut-throat competition and customer fickleness, the old business model just doesn't work any more and there's no alternative to monthly fees.

pqrdef

JuicyJesus wrote: »

For most people, who have a single current account with maybe one or two sources of income along with some Direct Debits

And this is the model they want to enforce. In the old world, most people who take up switching incentives don't bother to close the old account. Then they've become promiscuous customers, and banks hate that. And the old bank still has access to their credit file and can still target them with guaranteed acceptance on loans and credit cards.

So the new system is actually anti-competitive - it encourages people to use just one bank when they need to be encouraged to play the field for individual products and services.

MoneySaverLog

pqrdef wrote: »

They'll probably also go for more linkages, like the First Direct regular saver where you lose the rate if you close the current account.

So switch your FlexDirect and kiss goodbye to your Flexclusives.

Expect to see good deals on credit cards, loans and mortgages for main current account holders, turning into bad deals if you switch.

That's what I was thinking too

pinkdalek

Archi_Bald wrote: »

Perhaps you could offer practical advice on / answers to the unresolved issues?

What's the point, you would only pull it apart and come up with some other way of finding faults.

Allblue90

Hi everyone,

Just to try and clarify a few things...

Most banks are stating the account has to be open 7 days before you can initiate the 7 day switch giving you time to receive your card and set up internet registration etc.

The redirection service will redirect any credits an debits to the new account for 13 months as well as automatically informing the people who have debited/ credited your account with your new details. The only people you should have to inform yourself are CPA's and foreign payments. At month 11 of redirection you should receive a letter stating anyone that is still using the old account details at which point you will have to contact them.

Thanks!

Archi_Bald

Allblue90 wrote: »

Most banks are stating the account has to be open 7 days before you can initiate the 7 day switch giving you time to receive your card and set up internet registration etc.

I haven't seen any bank stating anything anywhere about the new switching service - - where have you got your information from? All public information that I am aware of is on the Payments Council website (apart from what Gideon and MSE said) - - and the word is "you can switch with 7 days".

Now, I have no problem if they come down to earth and say it will take at least a fortnight and may take up to a year, and that you might have to do some bits yourself.............not dissimilar to what we have had for the last few years, lol.

Archi_Bald

pinkdalek wrote: »

What's the point, you would only pull it apart and come up with some other way of finding faults.

LOL, what a way to say you don't actually have the answers, either!

brewerdave

pinkdalek wrote: »

It's so good to see the negativity around this place. Something which is being introduced to make switching easier, yet it seems as per usual there a those who just focus on the negative and pick out faults. Typically trivial queries which aren't really on reflection that stressful to sort out are they?

....my point is that George Osbourne and the banks may have "sorted" the process out but I can assure you that various merchants are nowhere near ready -not stressful??-you should have been a party to my telephone conversation with one supplier yesterday - they are insisting that I pay by debit/credit card for this month or face withdrawal of their "service" EVEN THOUGH they are fully aware that the direct debit details have changed -and this is some 15 working days after they received the communication from the new bank.:(