About a month ago we switched our current account between banks, as we were being charged really high maintenance fees, but the whole process of moving between banks hasn’t been without its problems.
All the Irish banks offer a switching service that is meant to make the process of changing between banks seamless. The idea is that a customer can fill in one simple form with their new bank authorising the automatic switch of all direct debits and standing orders to the new account. The form is then forwarded to the old bank, who are then responsible for notifying all the companies that take a direct debit to update their details.
Our terrible experience
We began this switching process in the middle of last month, and a couple of days later received a letter from our old bank confirming all the standing orders and direct debits that would be updated. It all looked good, so we didn’t think much more about it. That is until we started getting letters and emails from suppliers about overdue bills. These companies had attempted to take payment from our old bank account that had already been closed.
- Two insurance companies that were due payment 15 days after the switch took place had attempted to collect the direct debit from the closed account, and claimed not to have received updated direct debit details from the old bank
- Similarly our gas and electricity provider didn’t have our updated direct debit details about the new bank account some 25 days after the switch
- And most disturbingly, the old bank failed to notify itself to collect our mortgage payment from the new account!
The switch process didn’t fail entirely however. A mobile phone provider did receive the new bank account details, and managed to collect payment successfully from the new account. But that was the only case out of about 20 direct debits where it worked as expected.
Where the fault lies
I don’t know if the fault lies with the old bank for not notifying direct debit holders correctly of the new account, or if it was a failure of the companies that take direct debit payments not updating their details in a timely manner. All I do know if that the switching process pretty much failed.
I suspect that companies were informed by post about the new direct debit details, but haven’t actioned the change because their offices are closed during COVID-19 restrictions. I firmly believe that other companies simply ignore or don’t have the processes in place to accept updated direct debit instructions.
If we were doing this again, I would not use the bank’s switching process. It simply does not work. Instead I’d take it upon myself to make sure all the direct debits were changed.
That would involve the following steps:
- Use the old bank’s online banking to get a list of current direct debits and standing orders, or request one to be sent to you
- Check through the list and eliminate companies that you no longer use and removing them from your list
- Call each provider in turn to notify them of updated direct debit details, and ask them to send a confirmation of your new direct debit mandate
- Check your online banking regularly to check that payments have come out correctly, and if not follow up with the company concerned
It’s important to note that some companies generate their direct debit request transactions at the same time as the invoice is generates – which will be 14 days before it is presented to the bank. And so, even if you notify a company before a direct debit is due, they might still try to take payment from the wrong bank account.