MSE News: Bank switching 'hassle' must be eliminated, as full-scale current account 6 November 2014 at 10:16AM edited 7 November 2014 at 1:57PM in Budgeting & Bank Accounts 49 replies 5.8K views

Former_MSE_Paloma

A full-scale investigation of the current account market has been launched by the competition watchdog

Read the full story:

Switching 'hassle' must be eliminated, as full-scale bank probe launched

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apt

Ludicrous to investigate the current account market where the banks and building societies are clearly competing and offering cusumers some very good deals. It's also easy to switch. Much better to investigate something like telephone line rental where consumers are being royally fleeced.

pmduk

It does appear that the story is being reported in order for MSE to repeat its call for portable account numbers. I've never met anyone who quotes this as an obstacle for switching accounts.

Perhaps people just don't want to switch their account?

Joe_Bloggs

There is also hassle in switching. A new web site with subtle features, new phone app, new security hoops to jump through, perhaps a new definition of a banking day is included in new terms and conditions ...

I suggest that a major reason that people do not switch is because they do not have a back up plan if the switch went wrong.

In my view switching accounts is a mistake until you have built up a diverse collection of current accounts to switch. With a diversified collection of accounts the perceived risk of switching one of them is negligible. The rewards make it worthwhile

I would guess there is some kudos to be had from maintaining a credit link with a bank over a long period. Perhaps switching this away would reset the clock and harm creditworthiness. Perhaps the perception of the credit reference agencies take on this is a factor.

The CMA must be seen to be doing something especially when it is doing nothing.
Link to the announcement here:-
https://www.gov.uk/government/news/personal-current-account-and-small-business-banking-face-full-competition-investigation

J_B.

Archi_Bald

Joe_Bloggs wrote: »

The CMA must be seen to be doing something especially when it is doing nothing.
J_B.

Time to call for an inquiry in how the CMA uses taxpayers' money, and what value the taxpayers get from it.

VT82

I switched to Halifax a few years ago to get the £50 bonus, the £5 per month reward, and the Clarity Card with £5 per month reward.

Several years on, I am still getting my two lots of £5 reward, and am very happy with the service provided. So I'm not going to switch just because the powers that be think that more than 2% of current accounts should be switched every year!

Agreed that the Competition Watchdog focus should go onto something else entirely. This market is working fine!

Alpine_Star

Archi_Bald wrote: »

Time to call for an inquiry in how the CMA uses taxpayers' money, and what value the taxpayers get from it.

If their predecessor (Competition Commission) is anything to go by taxpayers did pretty well. The CC effectively paid for itself in banning single premium PPI and effectively ending the entire and gobsmackingly uncompetitive PPI market alone I reckon.

Consumerist

VT82 wrote: »

. . . Several years on, I am still getting my two lots of £5 reward, and am very happy with the service provided. . . This market is working fine!

The current-account market is perceived to be working well for those of us who are always in credit but is disproportionately loaded again those who are struggling to make ends meet. At the other end of the scale, those who have large overdrafts over long periods seem to get off proportionately more lightly than those who dip in and out of their overdraft during the month and are paying APRs which pay-day lenders would be proud of - like the banks, they have no concept of shame.

I smell the fear that this investigation may see an end to the so-called "free banking" lie but, because regulators currently have no control over prices, there will be no change to the banks' freedom to levy huge charges on small overdrafts.

pheonix254

pmduk wrote: »

It does appear that the story is being reported in order for MSE to repeat its call for portable account numbers. I've never met anyone who quotes this as an obstacle for switching accounts.

Perhaps people just don't want to switch their account?

Well I'd say it is definitely an obstacle for me as I have memorised my acc number and sort code - and use that recall probably 2-3 times a month.

It is also a pain for all my friends who pay me for organised holidays etc. to have to re-add my details to their own accounts - which can't be done on mobile, and requires the card reader/ dongle they lost 3 years ago.


So it is still a hassle. Not so much if you have a single account and 1 debit card and a couple of simple monthly DDs, but definitely where you stockbroker/bookies will freeze your account for money laundering when your account numbers start changing as a "precaution" for "suspicious activity" or refuse to refund any money back to any other card/bank other than which you've paid with in the past. It's often not as clear cut as you'd first think.

badger09

Is there any chance MSE Paloma could add a title to this thread which gives a clue as to what the 'News' is about :cool:

Uxb

Most busy people/families really do have better things to do with their lives than endlessly swap bank accounts - or energy suppliers for that matter.

Those in business know that swapping sub-suppliers is never straightforward and the 'costs' in both their time and money in sorting things out during and post a supplier swap need to be fully taken account of and not just the supposed price savings.
Same applies to swapping bank accounts.

If the competition watchdog wants to encourage other entrants then changing the UK banking model one of where the account holder has to pay an annual fee for their current account services as most of the rest of the world does might well do the trick.
I would have thought that any prospective entrant seeing that they are required to provide such services 'free of charge' is enough to make them go elsewhere for a decent profit.