I thought I would come back and update this thread with the latest on my switching experience.

On Saturday morning I received a text message from my mobile provider, telling me that they hadn't received payment and would be suspending my account in 48 hours. A DD had been taken from my new account on February 20th, and after much chasing around and eventually e-mailing a copy of my online banking transactions, the mobile provider accepted that a payment had been made. It appears that when I corrected the details in my online billing, they deleted the original DD and set up a new one with a slightly different reference. I don't know how they managed to take the original payment, as it should have had an incorrect account number, but it seems to be resolved now.

As part of the process of sorting this out, I called Co-op bank and informed them that there had been a problem with these two direct debits. They checked a couple of things and confirmed that everything had been set up correctly from their point of end. I specifically asked about the Switching Guarantee. The operator had to go away and ask a supervisor, but came back to me with the following critical information:

The switching guarantee only covers aspects that are within the control of the new bank. Anything that goes wrong that is not directly their fault is outside the guarantee; so if you're hit with late payment markers because a DD recipient doesn't update their systems fast enough and doesn't let you know in time, then you're on your own. In other words, the Switching Guarantee is completely useless, because if the bank had screwed up you could hold them to account whether there was a guarantee or not.

This is a seriously flawed process. The DD system and the Switching Service are both run by Bacs, but because Bacs don't force DD recipients to update their systems in a timely manner, people using the Switching Service are liable to get stung. I can say here and now that I would not use the Switching Service again, and would advise anyone else to manage the switch themselves.

Lastly, to those who have posted on this thread suggesting the use of mule accounts. The Switching Service is supposed to make switching easier for the Average Joe (or Joanne), who will neither know nor care what a mule account is. If you need a mule account to make it work properly, the Switching Service has failed. It will very rarely, if ever, be completed smoothly and automatically because there are too many factors outside the control of the Service.

In my case, to get the switching bonus I had to switch four active direct debits, and so it wasn't practical to use a mule account.

When I have switched a current account I've always double checked myself that DD's have been transferred over and set up as before. This is because I am the customer of the organisations, the new bank isn't. Sometimes a company requires a new DD to be set up, sometimes they reset the DD to not take any money and sometimes the company simply screws up!

Assuming the Bank did transfer the DDs over its hard to see their fault unless its also their job to monitor that DDs are taken (which you could have changed in the meantime anyway as you are the customer of the company the Bank isn't).

In general I have found the switching service works well with the caveat you need to double check everything has been set up as you expected.

If the Bank has made errors maybe ask for compensation and if the company taking the DD has made an error don't waste your time!?

Mule accounts are used for fraudulent transactions. People mean donor accounts, not mule accounts. Naturally, using a donor account makes no sense if you actually want to switch your account, as opposed to just wanting to bag a switching bonus. Not sure why this was suggested in the first place.

spikyone, I think your experience with the CASS is not representative. The last figure I have seen are that 3 million accounts have been switched. If there was any systemic problem, we would have heard about it by now. It appears you have been rather unlucky in that several of the parties involved appear to be incompetent. Can you name your mobile provider? We have heard from one or two mobile providers who are notoriously hopeless when it comes to changing DD mandates, whether as part of a formal switch or not. Vodafone is one one them, and Talk-Talk another IIRC.

The way it should work - and it clearly doesn't work this way - is that if a direct debit hasn't been updated and it tries to take money from your old closed account then the payment request should be forwarded automatically to your new account.

that is how it works for cheques for example, and any payments into your old account will be forwarded to your new account so why can't direct debits work this way

@Yorkshire Pud, I'm not really sure what you're getting at. The point of the Switching Service is that it is supposed to be a hassle-free way to switch your accounts. From https://www.currentaccountswitch.co.uk/Pages/Home.aspx

The Current Account Switch Service makes switching your current account between banks and building societies simple, reliable and stress-free.

And they also say:

Thanks to the Guarantee, in the unlikely event that something goes wrong, you can be confident that any interest or charges you incur as a result of any problem with your switch will be refunded

This is a core part of their advertising. Sit back, relax, it'll be done in a week and in the unlikely event something goes wrong you're covered by the Guarantee. There is no mention anywhere on the Switching Service website of a need to check that the DDs have been updated in time, nor that it only covers problems within the banks' control, and even if you've been cautious in timing the switch (as I was) there can be problems.

As I've shown, it's not a hassle-free process, which is fairly likely to go wrong if you're switching multiple DDs, and if something does then the guarantee offers no additional consumer protection since the FCA would likely support the consumer if the bank were at fault. The Switching Service advertising is seriously misleading because if you leave the switch to run its course without doing anything else, then you're probably going to end up with late payment markers on credit file when companies that take money by DD screw up.

As far as not wasting my time, I've already had to waste time checking that everything moved properly, calling my mortgage provider to make a manual payment, and chasing up my mobile provider to prove that they had in fact taken payment. If I hadn't done that, I'd have a late payment marker for both of those, and no phone service right now...

@colsten The mobile provider was Talkmobile, so related to both Vodafone and Talktalk! I should say I also had a letter from my credit card provider, telling me that I would need to make a manual payment because the DD had changed and they couldn't update in time - and my payment on that wasn't due until 9th March. I also had another (non-credit) DD that hasn't been taken, but should have left my account on 3rd March. So in total, four of ten DDs on my account have had some kind of problem. Bear in mind that I started receiving confirmations of switched DDs on 9th February. I'm a small sample size but 40% is a high screw-up rate.

The issue is that Bacs need to hold the companies that take money by DD to a higher standard. There is no reason why a company can't update their DD details, and take money from the right account, with 48 hours notice, and if they can't do that then they shouldn't be allowed to take money by DD. Until that happens, Bacs sure as hell shouldn't be advertising a reliable and stress-free service.

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