The Payment Council has this week pledged to make it easier for consumers to switch accounts from one bank to another, in the hope that it will encourage competition between banks, thereby getting a better deal for the consumers.
The scheme will apply to all members of the Payments Council, which covers the majority of high street banks and building societies, and is planned to be phased in over the next two years to be completed by September 2013.
The proposed changes address issues brought up by recent reports by the Independent Commission on Banking and the Treasury Select Committee.
The proposals are:
- Making account switching trouble-free for customers by ensuring any incoming payments are automatically switched to a customer's new account, without the customer having to notify anyone paying in money, for example an employer, themselves.
- Reducing how long it takes to switch an account from around eighteen days to a guaranteed maximum of seven working days.
- Ensuring all organisations that collect direct debits, or make payments directly into an account, update their own records promptly if their customer changes their account details.
- Creating a clearer system, with clarified timescales and consistency across the industry.
Gary Hocking, acting chief executive, of the Payments Council says: "We are looking to give customers total peace of mind that they can switch their bank account with ease.
"A generation ago most people would only have had a handful of regular payments set up on their account but nowadays most of us would struggle to remember all the payments we've signed up to - from regular savings to mobile phone payments.
"This makes it ever more important that the process to switch bank accounts is trouble-free. We want a comprehensive switching system that makes life easy for the customer – so that all outgoing and incoming payments are automatically switched too."
