A new system that will allow customers to switch current accounts within seven working days from September has moved a step closer to completion, with the publication of a customer guarantee.
The Payments Council, which created the £750 million system, has published a Current Account Switch Guarantee and Trustmark, which outline consumers' rights and the benefits of the new service.
The new switching system has been designed to cut the maximum transfer time between bank accounts from 30 days to just seven, and to boost consumer confidence in switching from one bank to another.
Currently, around 75% of the current account market is dominated by four major banks: Lloyds Group, RBS Group, HSBC and Barclays. It is a market that has become staid, with consumers often reluctant to embark upon a lengthy switching process.
Source: Payments Council, Account Switching – Quantitative Market Research Results, September 2012.
The new switching service, which builds upon a European directive, aims to improve competitiveness between banks by persuading customers that switching their current accounts is a smoother and faster process, with built-in safeguards.
This, it is hoped, will improve the service that banks provide to their customers.
The Payments Council's new guarantee promises that any payments sent to the old account will be automatically redirected to the new account for 13 months.
It also promises to refund any charges or lost interest that arise as a result of a problem with the switching system.
Current Account Switch Guarantee - select for full-size (opens in new tab).
Adrian Kamellard, chief executive of the Payments Council, said the switch had involved "massive system changes, both centrally and within individual financial institutions."
"Giving customers the confidence to switch current accounts is one of our main goals and the new Guarantee and Trustmark launched today should really help achieve this," he said.
For more details about the current account switch, see our recent banking guide.
Keith McDonald
Which4U Editor
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