Is currenct account switch reliable?

pilotamx wrote: »

Hi,
I have a question might seem useless. Is current account switch reliable?
I am concerned about one or more direct debit might fails if the switch is done on a date close to the payment. I understand that there is a sort of protection guaranteed by the scheme. However, a failed debit will trigger an overdue procedure against me by the debtor.

Moreover, does the creditor get the new account data with the switch procedure or I should consider updating my direct debit data after the switch?


thanks
S

It's reliable as far as it goes which is not far enough. The problem is direct debit payees who might establish a new direct debit on your new account so they have two direct debits in force, one transferred from your old bank and the new one. In addition they might cancel the next direct debit payment so you'll need to carefully check your credit card statement for the new bank appearing as a direct debit. Might still not help: I did that with my Tesco Bank credit card and made a manual payment because the old bank was shown on the statement and lo and behold they charged the direct debit to my new account so I paid double what I intended to pay.

In my recent switch to Starling Bank I had a particular problem with my American Express credit card direct debit. Upon receiving the switch notification Amex cancelled the direct debit fixed payment and demanded the full statement balance by direct debit which in my case was £649.48. Upon notifying Amex of their error they changed back to the fixed payment which would apply after the next statement so I still had to pay the full statement balance. Not difficult for me to pay but some people may have had difficulty.

So yes the 7 day switch works well but be prepared for hiccups with DD payees which could turn out to be expensive hiccups.

pilotamx wrote: »

Well I think I should carefully select a date in which no payment is due (maybe + and - 3 days).

I'd allow 1 - 2 weeks.

When you switch your old DDs are cancelled and new ones are setup, this takes several working days depending on the payee and new bank. Furthermore DD payments take 3 working days to clear so are typically requested 3 days ahead of the due date, by which time the setup needs to have finished. And... depending on the payee, if a bill is produced while the new DD is being setup it may well require manual payment. So to avoid issues as far as possible you need to avoid billing dates and payment dates. I've fallen foul of this before.

Mistakes happen too. During my last switch my new bank informed my payees of the switch twice. The result being that they all tried to setup a new DD twice, with the second attempt failing because an identical DD already existed. The result? DD setup failed, manual payment required...

bigadaj wrote: »

But for a cass switch the bank to which you're moving your account is liable for any errors.

They are indeed, but you're still liable for closely monitoring your accounts/bills etc. and sorting out any issues that do occur with your payees.