300,000 make current account switch


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More than 300,000 people have switched their current account in the three months since a new guarantee to take the hassle out of changing banks was launched, showing a surge of almost one fifth year-on-year.

The Payments Council, which oversees the new initiative to help shake up competition in the sector, said that a total of 306,240 switches were made in the last three months of 2013, marking a 17% increase on the same period a year earlier.

Within this new figure, 281,144 people were covered by the new service when they switched bank accounts - and a further 25,096 people switched but chose to keep their old bank account open - meaning they were not covered by the guarantee.

Under the switching guarantee, the new bank or building society the customer is going to arranges for all existing incoming and outgoing payments to be transferred and their old account is automatically closed as part of this process.

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The guarantee has also cut the length of time it takes to switch from up to 30 working days previously to seven - and 99.6% of switches are being completed in this timescale - the Payments Council said.

If anything goes wrong, the customer is entitled to be refunded interest and charges under the guarantee.

The figures showed that in December 2013 alone, 83,729 people changed current accounts, showing a 54% increase on the same month a year earlier.

A central redirection service has swapped more than 900,000 payments over to new accounts since the guarantee was launched last September.

The success of the scheme is being measured on factors such as customer awareness of and confidence in the service rather than just switching levels.

The Payments Council has been carrying out monthly consumer awareness surveys about the service across the UK involving around 2,200 people each time.

According to its latest findings, three-fifths (59%) of the public were aware of the current account switch service by December.

A similar proportion of people (58%) said they are confident about how the service works and three-quarters think it would be quick and easy to switch.

National television, radio and print advertising campaigns have been taking place to raise awareness.
Adrian Kamellard, CEO of the Payments Council, said: "With the launch of the new service we have set out to eradicate any concern customers may have had in the past about switching their current account, and although our work isn't yet done, we have got off to a great start.

"Even though the current account switch service only launched a few months ago most people are already aware of it and are confident in it.

"More than 300,000 switches in three months is an encouraging start and we hope this will be further boosted by the second wave of our national advertising campaign that kicked off this January."

The Payments Council said feedback from the banks and building societies taking part in the scheme, representing the vast majority of the market, has been that customers can help prepare for their switch by being ready to give their new provider an up-to-date bank statement that shows their current address and full details.

This is because their switch could be delayed if the personal details provided by the customer to the new bank does not match those held by the old bank, for example if they have married or moved house.

Customers also need to be ready to give details from their existing debit card to their new bank or building society to enable security checks to run smoothly.

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