Beware the cost of switching current accounts

After a less-than-satisfactory banking experience with Alliance & Leicester (Santander), I thought I'd vote with my feet and change banks. However, this was a lot easier said than done. Banks will assure you that the 'switching team' will manage the whole process for you, but I beg to differ.

I was told by my new bank, Bank of Scotland, that it would take it approximately 28 days to sort out this task for me - wrong! Instead, some of my monthly direct debits weren't transferred over, which resulted in late payment charges to my credit cards.

Because of this, I kept my old Alliance & Leicester account open for an extra couple of months to cover the slow transfer of my direct debits.

However, I obviously had to switch my salary to Bank of Scotland to cover the majority of my monthly direct debits. So I'm now in a situation where I'm accruing charges on my Alliance & Leicester account because of the lack of funds going in.

I've been in touch with both banks to try and sort out this shambles, which is costing me dear - so far around £419 in charges. I've also contacted the Financial Ombudsman, but I haven't heard back from it.


After Sue kept chasing Bank of Scotland, it finally tried to palm her off with £50 to cover "the inconvenience and poor service". However, Moneywise contacted the bank to see if she could be given something more for her troubles and see what it would to do about the ongoing direct debit issue.

Bank of Scotland's response simply wasn't good enough. It said: "We issued mandates to all companies on a list of Ms Jones's direct debits that Alliance & Leicester provided, but unfortunately not all of them responded. This does sometimes happen and alas is out of our control."

In other words: "We tried, we failed, so we won't try again."

How can the bank shirk all responsibility when it says on its website that you just have to "complete the switching details section" then "leave the rest to us"?

It's just not acceptable, especially when it then goes on to lamely suggest that Sue chase up the companies herself - and that it can provide an up-to-date list of all the companies she can contact.

Why should Sue do the legwork, and what about all the late repayment charges caused by this fiasco that she has had to pay?

Moneywise went back to Bank of Scotland. It eventually agreed, on receipt of evidence, to "reimburse any reasonable charges she has incurred". On top of this, she will also receive £100 compensation.

Your Comments

I had similar problems with my direc debits when I switched from Barclays to Nationwide. It did not cost me anything other than inconvenience but switching is not quite as easy and straightforward as is claimed.

I had a very complete list of all my direct debits and standing orders and, certainly, most of them went over with no issue. The ones where there was a problem were those where it was a once-yearly payment. Some just did not go over. I sorted the few as they cropped up. Two of the payments were cancelled and the magazines in question lost a customer, whilst the third I renewed. It was not a bad result really (actually better than I expected!) as I am no believer in the claims made by banks anyway!

When I changed my bank account I found that some companies (in my case Aviva) will not take the banks word that you have changed accounts and they will send you a new mandate to fill out and return. With my experience it was Aviva who were slow to send out the new mandates that was the problem so I had to send a cheque to make up for the missed payments. Aviva covered my costs incurred and made sure that I wasn't penalised for the missed payments as it was for a pension.

I switched from HSBC to Nationwide. The direct debit for my car insurance (Co-operative) failed to be transfered from old bank to new bank. It caused me my car being seiged by the Police due to my insurance company Co-op cancelled my insurance cover. Nationwide refuces to compensate my financial loses (car recovery+increase in insurance cover cost+etc). I am now filling a claim to Nationwide.

If you have been badly treated by your bank and you have followed all the procedures set down in their terms and conditions, backed up by, their web site claims for any of the multitude services they say they provide, the 'claim' route is just another way of putting you off. On two occasions I have had a dispute with banks and refusing to go down 'test your stamina' road I have put them in the County court. On both occasions I found the County Court staff most helpful, mainly I suspect because one of the things we probably have in common is that we hate banks with a passion, and the chances are that if your claim goes before the Judge he probably hates banks as well. In my case the banks settled before things got that far, including all costs, mainly, I suspect, because they didn't like the possibllty of a judgement being made against them. Some years ago I remember one of the big banks letting such a claim go the distance and when they lost the case and dragged their feet in paying, the claimant sent in the bailiffs to the branch. I wish I could have been there to see that. I won't play their game, the banking system is run by a bunch off bullies, I don't owe them a red cent so any opportunity I have I give them a good smack in the gob.

 If their action causes you loss, can you use the law to get redress? How about consequential loss?