Problems cancelling a current account switch.

ordnancesurvey84

My partner has recently opened a current account with Starling and used the current account switch service to close his existing current account with HSBC (which he opened in 2017) . He doesn't have any other current accounts in the UK. The switch date is 8th April (so fewer than 7 working days away). 
I advised him (rightly or wrongly) that it would be best to keep his HSBC account open as I understand that having a current account which has been open for a long time is looked upon favourably by lenders.
So he called Starling to cancel the switch - which they did from their end but also advised him to contact HSBC to let them know. He called HSBC and they said that the switch was now irreversible and couldn't be stopped. So he then called Starling back, told them that HSBC can't stop the switch, so we might as well proceed with the switch and please reinstate it from your end too - but they said they now can't reinstate it either.
What should he now expect to happen? Presumably his HSBC account will close on switch day (as HSBC weren't able to stop this from happening), but none of the balance or payments would be transferred (as Starling weren't able to reinstate the switch from their end). 

Zanderman

Can't help, except to say that the CASS switching system does strictly specify that switches can't be fully cancelled once the 7 days has begun.

So if the request was within those 7 days it will be be a complicated, and possibly unpredictable, process and result.  Best not to have attempted it if within the 7 days.   Starling should, I would think, have told you that and tried to put you off.  

The wording I've seen (on a google just now) for cancelling within 7 days simply says that 'not all elements of the switch can be cancelled' if in the 7 days.  Make of that what you will.

ordnancesurvey84

Many thanks - yes it's a bit of a mess isn't it? Will see what transpires on 8th April!

colsten

If your partner leaves it until April 8, the mess could just get bigger.

Your partner can transfer his balance himself to Starling. He can also stop any SOs he might have at HSBC, and set up new ones at Starling. Any DDs need to be changed via the payee. Many companies allow you to change the sort code and account number for the DD online. Others might take the instruction by phone, or they might need something in writing.

Your partner will also have to give his new bank details to anyone who pays him.

ordnancesurvey84

Thanks, Colsten - yes this is all being taken care of - thankfully not many direct debits involved. It does just seem like an odd aspect of the service design that with fewer than seven working days before the switch date it is possible to cancel the transfer of balance/DD/SO part of the switch while not being able to cancel the account closure part of the switch - why would that ever be a useful outcome for anybody?

colsten

I can't answer that, it's obviously somewhat stupid to close an account with active SOs/DDs and a balance. It's also puzzling why Starling advised that your partner should contact HSBC - - once they have accepted the switch instructions, they are the manager and should deal with all aspects of the switch. I suppose one possible explanation is that either the Starling or the HSBC CS person have given your partner false information. There might be other explanations.

[Deleted User]

colsten said:

I can't answer that, it's obviously somewhat stupid to close an account with active SOs/DDs and a balance. It's also puzzling why Starling advised that your partner should contact HSBC - - once they have accepted the switch instructions, they are the manager and should deal with all aspects of the switch. I suppose one possible explanation is that either the Starling or the HSBC CS person have given your partner false information. There might be other explanations.

Once it's been validated, Starling may have difficulties halting the switch as the recipient only.

HSBC can stop the transfer as they can re-categorise the switch as a rejection via the Current Account Switch Scheme (CASS) up to circa 48 hours before the transfer date. If this is done with the final 7 days then some of the payments might have already been moved but the original account would remain open and the payments can be fixed manually.

I suggest you attempt to speak directly to HSBCs switch team or at least get HSBC Customer Service to send a message directly through to them.

ordnancesurvey84

That's really helpful, Deleted User, we will give that a go!

Armorica

^^ What Deleted User said. To add a few bits and pieces around what the switch actually is:
- It's designed so that, if you want to, you only have to deal with the 'new' bank, so the 'old' bank can't block the switch. In practice, the old bank could reject the switch.
- Now, the switch itself....it's really a few different things:
a) Your old bank provides details of standing orders and internet/mobile banking payees to your new bank so they can be set up on their system. If this goes wrong, you could see standing orders being taken out twice. You can review this by seeing if you can see set up in both places. This a lot easier if you have no standing orders!
b) Another thing is that people who send you money (via Bacs direct credit) or take money from you (via Bacs direct debit) are given your new bank account details and are asked to update their records. Some are quick off the mark, and these may be difficult to unravel. However, these should only happen once i.e. they shouldn't be duplicated. But it can get a bit confusing is your salary is paid to one place, but your direct debits are taken from another. You may be able to check via internet/mobile banking which direct debit mandates are set up against your account.
c) But, quite a few organisations don't update their instructions quickly...and so the Bacs/Faster Payments infrastructure also has a redirection added when you switch accounts.  So if your employer still tries to pay money to your old account, the infrastructure will replace the details of the payment inflight with that of your new account.

Once the switch is complete, this means the old account basically has to/is closed, because it's pretty impossible to get money there  - it will be redirected to your new account. (The same isn't quite true for cards, CHAPS, cheques - but I'm assuming CHAPS/cheques are uncommon.) HSBC might be able to stop the account closure - but that doesn't achieve much if b) and c) have been initiated/completed.

There is a concept known as a partial switch - but you've not gone down that route. This probably should have been the route followed instead in this case! You can keep the old account open, and you have more control over selecting which payment instructions are carried over to the new account.

ordnancesurvey84

Many thanks Armonica - that's really useful!
My partner has now spoken for a second time to HSBC and they have reassured him that his account will remain open. 

Armorica

No problem - if step b) has happened (probably), then he'll need to keep an eye on both accounts for a while to check what is being taken from where. While the logistics vary by bank, you tend to have until at least 2pm each day to make sure funds are available in the right place so that e.g. direct debits aren't returned unpaid.