Bank Switching Service Cost Me £

YorkshireBoy

michael1234 wrote: »

1/ From their point of view, I cancelled the DD and started a new one

You didn't. FD asked them to collect from them and not your old bank.

and I hadn't explicitly informed them that I wanted this new DD to continue with a full balance monthly payment.

You don't need to.

They claim that their policy is to start all new DD with minimum-balance only unless explicitly informed by the customer.

If that is the case, then they should say so...both in their T&Cs and in the 'confirmation of set up of your direct debit instruction' letter they sent you. I suspect they do/did neither.

2/ The bank switching service/guarantee in a nutshell leads the customer into believing that they can't lose money as a result of the switch. I think that might be why FD honoured the payment.

Correct.

All told I think the financial services people (whoever they are) need to improve this switching service and the likes of MSE/Which?/MoneySectionsInNewspapers/etc and others who frequently suggest people should switch their bank accounts should stop doing so until this issue is resolved.

To be fair, your experience is the first I've seen reported on here...which is why it's the fault of BOI (who provide your PO card), not the system. And BOI aren't exactly well know around these parts for good customer service!

System

It's BofI's fault for their shoddy setup.

What did the relevant statement say?
It should have noted the payment setup.

michael1234

Good point - I checked the statement and indeed it shows that the full balance was to be collected in the next month (and it wasn't).

But, and to address other points, surely a direct debit with a new bank is a completely new direct debit mandate? Isn't it the case that in reality the old DD gets cancelled and a new one gets setup and there is no concept of "transferring".

YorkshireBoy

michael1234 wrote: »

But, and to address other points, surely a direct debit with a new bank is a completely new direct debit mandate? Isn't it the case that in reality the old DD gets cancelled and a new one gets setup and there is no concept of "transferring".

That's not really your concern. You ask for the switch. How the banks and DD originators do it (within the BACS rules...which the originators sign up to) is their business. All you want is for whatever arrangements you had before to be transferred to the new account.

What is important is that you have a guarantee, provided by the new bank, that you won't be left out of pocket should anything go wrong. In other words, you'll be put back in the position you'd have been in before the error...and that includes correcting any negative CRA file data reported due to the error.

It's a little like the DD guarantee. The only bit you're concerned with is getting your money back for a DD claimed in error. The fact that the bank claims whatever they pay you from the DD originator, by way of the DD indemnity scheme, and so isn't left out of pocket, isn't your concern.

michael1234

YorkshireBoy wrote: »

That's not really your concern. You ask for the switch. How the banks and DD originators do it (within the BACS rules...which the originators sign up to) is their business. All you want is for whatever arrangements you had before to be transferred to the new account.

What is important is that you have a guarantee, provided by the new bank, that you won't be left out of pocket should anything go wrong. In other words, you'll be put back in the position you'd have been in before the error...and that includes correcting any negative CRA file data reported due to the error.

It's a little like the DD guarantee. The only bit you're concerned with is getting your money back for a DD claimed in error. The fact that the bank claims whatever they pay you from the DD originator, by way of the DD indemnity scheme, and so isn't left out of pocket, isn't your concern.

I completely agree that that is how it ought to operate. I made this post to make people aware that on the ground the experience isn't always like that. I spent well over an hour going back and forth between bank and credit card company and probably spent a few pounds on phone calls doing so. I really think that until this issue is resolved properly (not my personal issue but the general DD switching thing) the "responsible" financial press such as MSE etc should not be promoting it as they currently are.

savingwannabe

I am sorry I must post, I don't like the implication that MSE is irresponsible. It is a forum that is trying to help consumers in a climate of imperfect information. They are not a perfect source (but pretty damn close) but they are better than just being thrown at the mercy of the market which is run by banks and financial organisations which exist to make profits by any means necessary. I cannot think of the amount of money that MSE has saved me. I believe MSE is a solution to much of the financial market failure consumers face in the UK.

eskbanker

michael1234 wrote: »

I really think that until this issue is resolved properly (not my personal issue but the general DD switching thing) the "responsible" financial press such as MSE etc should not be promoting it as they currently are.

But there have been hundreds of thousands of switches and, as noted in an earlier post, your experience (of a DD amount being varied) is highly unusual. No system is perfect and, while it's understandable that you're unimpressed, it's not realistic to extrapolate that to an entire process being fundamentally flawed for everyone, to the extent that it shouldn't be promoted.

michael1234

HI. I definitely didn't mean to imply that MSE is irresponsible. I think its a great site with a lot of useful advice.

Nobody is perfect 100% of the time. I am highlighting a very specific issue that all the mainstream financial press in general seem not to be aware of because I read lots of articles about how we should switch our current accounts as these days it is pain free and we would get a better deal if we did.

Some years ago it seemed quite easy to bash out a post on a forum without worrying too much about every i being dotted etc. I'll be more careful in future or more likely won't post at all.

savingwannabe

I am sure you are welcome to post. Please do. :beer:I just get upset if anyone has a go about MSE as I know how much the posters on this thread and others, staff and Martin have helped me and I am not switched on at all.

YorkshireBoy

michael1234 wrote: »

I really think that until this issue is resolved properly (not my personal issue but the general DD switching thing) the "responsible" financial press such as MSE etc should not be promoting it as they currently are.

"This issue" is one financial institution messing up on one direct debit instruction transfer. I hardly think it's reasonable to call a halt to the entire promotion of the CASS due to one institution messing up on one direct debit instruction transfer.

If you do feel so concerned, then by all means please do write to BACS (who run the CASS) and tell them that BOI messed up on one direct debit instruction transfer. Please do post back when you get their response and let us know what it is.