Account switching - a word of warning

spikyone

I've just switched my main bank account to the Co-op's current account using their switch service, and thought I would warn of some potential problems. I will emphasise that these don't appear to have been caused by the bank, but rather by the other end of the direct debits.

I intentionally set my switch to happen in a quiet time of month with no payments due for a week, to minimise the risk of missing payments. I'm an engineer which makes me cautious with anything 'new' until it's proven, so I also made a note of the dates that all my DDs were due to leave the account. Last week I got confirmation from most of my providers that the DD details had been updated; all by Thursday 9th, which should have been in plenty of time for the next due date of Wednesday 15th. All direct debits were showing as set up correctly in my online banking too.
Yesterday (15th) I checked my bank account. My two energy accounts have both taken the DD - but not my mortgage company. Coincidentally my mortgage is with Platform, part of Co-op. I phoned them up, to be told that they hadn't received the information in time so had to set up the DD starting 15th March, and I should be getting a letter. Oh, and it was lucky I'd called. Needless to say, given the ability of other companies to confirm updated DD details last week, and the fact that my bank and my mortgage provider are the same company, I was not particularly impressed. Platform's customer service wasn't great either, with the insinuation that it was my fault they'd taken considerably longer than anyone else to update my details.

So, I looked at my list of DDs and saw the next one due is my mobile provider. I've checked my online account and for some reason they seem to have updated my sort code but not the account number, which may mean I'm hit with a £3.50 charge for paying by card rather than DD this month as it's now too late to correct the DD details. I will, of course, be challenging this out of principle.

So whilst there is a bank switch guarantee, it seems that this system remains flawed. The guarantee only covers you if your new bank screws up, but in my first experience of using the switching service (rather than doing it myself), half of the DDs to date have encountered problems due to the other party. I'm not convinced that the switching guarantee will cover this as it isn't the bank's fault, and I'm certain it would have been no use had I missed a payment entirely and been left with a late payment showing on my credit files.

The moral of the story - if you're using the current account switch service then:
1. Make sure your switch happens during a period you don't have any DDs due for a week, if possible
2. Make a note of all payment due dates, and check the money has actually gone out on every occasion that it should
3. Pro-actively check with companies that should be paid by DD that your details have been updated correctly as soon as the switch is completed

mt99

Thanks for taking the time to post this info

my understanding is that you should be able to claim the £3.50 back and any other that you have to pay using the direct debit switch guarantee i e by contacting in your new bank and asking them to give it yo you under the terms of the guarantee

colsten

It is entirely COOP Bank's responsibility to get it all sorted for you. You should be giving them heat over it. It's not your job to ensure the DDs are all transferred over properly - though in reality, banks sometimes fail on it, as you have experienced. They should therefore be paying you compensation for the work you had to do to clean up after them.

Candyapple

Or better yet, don't actually switch your main account - that's what mule accounts are for

spikyone

Thanks for the replies.

The extent to which the Switching Guarantee covers you seems to be a bit ambiguous - as far as I can tell, the problems I'm experiencing have been caused by the third parties rather than the bank, and it's not clear whether problems outside of the bank's control are covered. I'd like to think the guarantee will cover it, but even if that is the case it's far from the hassle-free service that's advertised. The 'other' side of the DD process doesn't work properly so there's a decent likelihood that something will go wrong - I'd been careful in setting the switch to happen at a quiet time of month, I imagine many will just allow it to happen on their new bank's suggested date. And those less careful may not even realise they've missed payments.
It isn't correct to say "the switch will happen in 7 working days" if the organisations that receive money from DDs can take several days to update their system and need that update to be in place several days before payment. When I tried to correct the DD with my mobile operator, their website suggested that updates need to be made 5 days before the due date. In an electronic society where data can be sent anywhere in the world in seconds, that's pretty poor.

@Candyapple, in this case I actually wanted to leave my previous main account provider due to their increased fees/reduced interest and didn't have another suitable account to use for the switch. Most people outside MSE probably wouldn't even know what a mule account is...

meer53

it's not the switch service thats at fault, it's the companies who you pay by DD. They are advised of your new account details during the 7 day process, if they don't update their records, you can't blame the bank. You will be covered for any losses by your new bank.

vet8

This is very interesting. I have not switched banks for several years because when I did so twice in the past it was an absolute disaster on both occasions. I had to redo every single DD., most of them twice, I do not know whose fault it was, but it was a pain and knowing the bank is not at fault is not much help when you are desperately trying to get your mortgage paid before they mark you as a default. Hence I have been nervous about switching again.

YorkshireBoy

vet8 wrote: »

This is very interesting. I have not switched banks for several years because when I did so twice in the past it was an absolute disaster on both occasions. I had to redo every single DD., most of them twice, I do not know whose fault it was, but it was a pain and knowing the bank is not at fault is not much help when you are desperately trying to get your mortgage paid before they mark you as a default. Hence I have been nervous about switching again.

The CASS guarantee (along with associated regulation/code of practice) also covers protection of your credit history, along with financial losses.

That said, I'd never switch one of my main accounts using the CASS.

As for "several years ago", do you remember exactly when?...ie was it pre CASS (late 2013?).

vet8

It was certainly pre-CASS. I hope the system is better now, but I am a bit "once bitten twice shy" about it.

Jo_Blogs

Candyapple wrote: »

Or better yet, don't actually switch your main account - that's what mule accounts are for

Exactly! Plus, if you do move your actual main current account, you loose the history. Better to set up a mule account, especially if you wish to take advantage of the switching incentives .

datlex

I had a similar issue with coop with British gas. Payment not taken on correct day. Had a chat with BG they sorted it. Payment was taken following week without problem. It was something to do with how long a DD instruction takes to process, in their case 14 days. (this was what the BG advisor told me on the phone)