Current Account Switching. Who is responsible for problems?

ricsto

Hi All,
First post here and hopefully somebody can provide some insight. Close to pulling my hair out.

Back in Feb I used the switching service to transfer my personal First Direct current account to HSBC Advance account. Transfer appeared to run smoothly except for an issue with a direct debit that has come to light months later.
The direct debit is a monthly amount of £100 on a balance transfer card with Sainsbury Bank. For some reason Sainsbury have constantly had issues with the DD, charged me £12, put a mark on my credit file. I've rang them every month and they apologise and reverse the £12 charge, they've deleted the Direct Debit, recreated it and still the issue continues. I've rang them today and it appears Sainsbury have been trying to retrieve the DD from my old and now closed First Direct Account. They refused to reverse the £12 charge and say it's not their problem that they were not instructed of the new account details. I rang my new current account holder HSBC who confirm that they have the DD for Sainsbury that was transferred from First Direct but Sainsbury have never attempted to retrieve the monthly payment using the DD. HSBC say the solution is to delete the DD and create a new DD with Sainsbury but it's not their problem that Sainsbury were trying to retrieve from a dead account and neither is it their issue of the costs I've incurred.
I then rang my original account with First Direct who say the solution is to delete and recreate the DD on my new account with HSBC. They (FD) say it's not their issue and it should be dealt with by HSBC.
The switching service is all well and good and in the main works well but when it goes wrong there appears to be nobody responsible. I'm going around and around in circles.
I've spent hours in phone queues today and would reluctantly pay the £12 to Sainsbury for th e missing payment but the black mark on my credit file is something I can't accept as I believed the transfer service is completely transparent and DD will just get transferred without issue.

Can anyone throw any light on who is responsible and how I can resolve this with regard to the charge and the credit file mark?

I hope that made some sense.
Thanks
Richard

eskbanker

Hmm, tricky one!

Although it's generally understood that the receiving bank, HSBC in this case, is responsible for issues directly arising from a CASS switch, I can understand their line of argument that the DD mandate did move over and is ready for use, so am unsure that they have an uncapped liability for the (in)actions of third parties.

My recollection is that there have been other reports of DD problems with Sainsbury's cards, which suggests an issue at their end. My suspicion would be that HSBC will be able to demonstrate that they did notify Sainsbury's of the switch (via the usual CASS process) and so can't be held responsible for subsequent issues.

When Sainsbury's first tried to call a monthly DD payment from FD (after failing to update their records) my understanding is that the CASS process redirects such requests from old to new bank so that HSBC would have paid Sainsbury's, but I'm not familiar with the actual nuts and bolts of how this works.

However, when they later tried to recreate the DD from a closed account, this simply shouldn't work, so it might be worth pressing them on this as I can't see how that would have happened.

Perhaps worth getting proof from HSBC that they advised Sainsbury's of the new account details and then complaining formally to Sainsbury's?

ricsto

Thanks for the quick reply "eskbanker". It's an odd issue as the DD clearly transferred from FD to HSBC. Also clear that Sainsbury have never used the DD that transferred to HSBC.

I think the fact that Sainsbury somehow created a new DD on a dead account (FD) possibly might provide some leverage.

BTW I googled your words "DD problems with Sainsbury's cards" and I'm clearly not alone as many people are complaining of the same issue.

I'll try and get some proof from HSBC of new account details being notified to Sainsbury and take it from there with Sainsbury.

Thanks Again.

18cc

The current account switching service guarantee is absolutely crystal-clear that the new bank is responsible for any problems and for reimbursing you if anything goes wrong Google it and you will see

eskbanker

18cc wrote: »

The current account switching service guarantee is absolutely crystal-clear that the new bank is responsible for any problems and for reimbursing you if anything goes wrong Google it and you will see

I don't believe it's as simple or clear as that, hence the considered response above. The new bank is responsible for the consequences if a DD mandate isn't moved from old bank to new bank, but in this case the mandate itself was transferred successfully from FD to HSBC.

Please highlight any credible source for the assertions that "the new bank is responsible for any problems and for reimbursing you if anything goes wrong"....

18cc

Well of course I am no expert but the following link opens a PDF which says that in the event of anything going wrong you will be reimbursed if any interest and or charges

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.currentaccountswitch.co.uk/SiteCollectionDocuments/CurrentAccountSwitchGuarantee.pdf&ved=2ahUKEwjpidqO9IfjAhUjyosBHfOlDC8QFjADegQIBhAB&sqi=2&usg=AOvVaw1IpOT8J4oNPgFktaC7U8Em

eskbanker

18cc wrote: »

Well of course I am no expert but the following link opens a PDF which says that in the event of anything going wrong you will be reimbursed if any interest and or charges

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.currentaccountswitch.co.uk/SiteCollectionDocuments/CurrentAccountSwitchGuarantee.pdf&ved=2ahUKEwjpidqO9IfjAhUjyosBHfOlDC8QFjADegQIBhAB&sqi=2&usg=AOvVaw1IpOT8J4oNPgFktaC7U8Em

The direct link to the CASS guarantee is https://www.currentaccountswitch.co.uk/SiteCollectionDocuments/CurrentAccountSwitchGuarantee.pdf but it's specifically related to charges levied by either of the banks concerned as a result of a failure with the switch:

If anything goes wrong with the switch, as soon as we are told, we will refund any interest (paid or lost) and charges made on either your old or new current accounts as a result of this failure.

In this case, the DD mandate was successfully switched from FD to HSBC, and so HSBC would seem to be justified in denying responsibility for an issue that was apparently caused by Sainsbury's - effectively that clause indemnifies the switcher against consequential charges levied by FD or HSBC (in this case) as a direct result of a failure in the switch process, rather than being an open-ended commitment to accept liability for what was or wasn't done by other parties who aren't bound by the Ts & Cs of a banking process....

18cc

Not sure about that - if it was me I would certainly say if anything goes wrong means exactly that - anything

it doesn't say "anything apart from'. Perhaps it should but it doesn't!

eskbanker

18cc wrote: »

Not sure about that - if it was me I would certainly say if anything goes wrong means exactly that - anything

it doesn't say "anything apart from'. Perhaps it should but it doesn't!

But it's specifically "anything goes wrong with the switch" and in this case HSBC are effectively arguing that the issue that arose wasn't actually directly something that went wrong with the switch (as the DD mandate was successfully transferred).

Even if the issue fell under the broad definition of 'anything going wrong with the switch', the guarantee wording doesn't commit banks to remediating any consequences, it's very specifically "we will refund any interest (paid or lost) and charges made on either your old or new current accounts as a result of this failure", i.e. not "we'll reimburse anything and everything wherever it came from". In OP's case, there was no such interest or charges on the current accounts, so the guarantee doesn't commit HSBC (or FD) to any action.

Ultimately it seems to come down to interpretation but I can't see anything in the guarantee that OP can point to and insist that HSBC act on in the context of charges imposed by a credit card company - it's certainly not "absolutely crystal-clear that the new bank is responsible for any problems and for reimbursing you if anything goes wrong"!

ricsto

18cc wrote: »

Not sure about that - if it was me I would certainly say if anything goes wrong means exactly that - anything

it doesn't say "anything apart from'. Perhaps it should but it doesn't!

The view of HSBC (my new bank) is that they're not liable as there was nothing wrong with the switch. The DD mandate with respect to my Sainsbury CC was transferred to HSBC without issue. Sainsbury however have never tried retrieving the monthly payment from my new HSBC. Sainsbury say it's not their fault as nobody told them about the new account details. My reply to Sainsbury was, "isn't being informed of the new account details part of the switching process?". Their customer representative reply was, "I don't know, I'm not familiar with the switching process".

I feel as though I've fallen through a gap with the switching service guarantee. Apparently nobody is responsible.

As for the £12 late payment charge from Sainsbury due to unsuccessful retrieval of the DD it's taken so much of my time getting nowhere that I'd write that off. What I can't deal with is the mark on what was a near perfect credit reference due to an issue with the switching service that I had no control over.

I'm inclined to ring Sainsbury again, hopefully speak to somebody who is sympathetic to the issue and say, "look it clearly wasn't my fault, I'll pay the £12 late fee but please request removal of the mark on my credit history".

It's a pain but I do believe that when push comes to shove there are limitations with the switching guarantee.

The only weight I might have with Sainsbury is that they managed to set up a new DD mandate to my old account in April when the account was closed in Feb.

18cc

Well it's probably not worth going on, but for me clearly the direct debit was not transferred properly

i have no doubt that the old Bank sent the direct debit to HSBC and HSBC put it on the account but whether anybody told Sainsbury's or not ( or if they did , tell them properly) is another matter

to me it seems the clear case that HSBC should be refunding your £12

On a related topic I have heard on these fora and elsewhere of people who do switches and direct debits falling through the cracks - appearing on accounts but the originator not being told properly and suddenly finding their mobile phone stops working because the monthly direct debit hasn't been taken on the new account