Financial News

  • 14 April 2014, 13:48

Current Account Switching Up In New Scheme

A growing number of consumers have taken advantage of a new regime making it easier to switch banks.

More than 600,000 current account customers moved to new providers in the last six months, since the week-long switch guarantee was launched.

The number of customers switching rose by 14% compared to the same period last year, according to the Payments Council.

Under the rules, a customer's new bank takes charge of the transfer.

The Payments Council said increased awareness of improved switching and growing consumer confidence was behind the spike.

It said 67% of people in the UK are now aware of being able to switch more easily, up from 59% at the end of 2013.

It added that customer confidence in the scheme had also risen, rising 9% to 65%.

The switching guarantee promises that a customer's new bank or building society is responsible for transferring all existing incoming and outgoing payments.

It also automatically closes old accounts as part of the process.

Prior to the new scheme it took up to 30 working days for a transfer to occur.

The Payments Council scheme also ensures that if the switch fails any charges are not levied against the customer.

It said that the data transfer system was operating efficiently and 99% of all transfers were conducted within the seven-day window.

Payments Council managing director Gary Hocking said: "By making the current account switch service quick, hassle-free and removing the fear factor we've taken away the barriers customers told us they had when it came to switching.

"Six months in and the latest figures suggest people clearly seem to be getting the message that things have changed for the better."

High street banks and building societies have launched a series of new accounts since the short-switch period was brought into force, as a way of enticing new customers.

Mr Hocking added: "There's also been a noticeable surge of advertising activity from current account providers big and small, suggesting that the new service is helping foster competition and choice for customers.

"As time goes on and the track record of the new service builds, we look forward to these encouraging results continuing."