Don’t bank on that switch being easy


BY JOHN ELLIS, FINANCIAL ADVISOR

We flagged in an earlier piece that D-day was coming for those who have to move from Ulster Bank but we make mention of it again because, according to Ulster Banks CEO Jane Howard, the bank  intends to move forward with plans to  freeze the accounts of a first wave of customers who have yet to move to a new bank as of from Friday, November 11.

Once an account is frozen direct debits and standing orders will stop going out and customers will lose immediate access to their funds. Then 30 days later the account will be closed permanently.

If you remember in April/May this year account holders were informed that they had six months to shut their account and switch to a new bank, the credit union or An Post.

Ulster Bank is not expected to leave the Irish market completely until next year. The bank has divided its  customers accounts into different groups and put them on rolling schedules for closure as part of its exit strategy. When TDs contacted the bank on behalf of worried customers they were informed the least active accounts would be targeted first, ie. accounts with fewer than five transactions a month, then the busier accounts would begin to close.

According to sources the bank is “taking a tentative approach to the freezing of accounts” and is pulling out all the stops to help people whose main account is with Ulster Bank by giving them extra supports.to complete the switch.

They are examining the profile of account holders and assessing the potential impact of cutting access to their accounts especially those accounts that receive pension and social welfare payments allowing them more time to move.

The bank has said that more than 70% of customers notified earlier this year have either closed or significantly wound down the level of activity in their current account or left it inactive. This leads us to believe that close to a third of account holders have yet to make any significant moves to leave the bank while not all those who’ve begun to move have completed the process.

According to Central Bank Governor Gabriel Makhlouf, some people’s experiences of trying to switch “leaves something to be desired”, and he has mentioned issues such as the bank’s delays in answering phones.

Research has also showed that 60% of Ulster Bank  consumers reported challenges with switching, with the most significant issue being transferring direct debits and payments (29%). A further 10% reported difficulties in accessing in-person support, according to research by the Competition and Consumer Protection Commission (CCPC).

Speaking to reporters recently, Governor Makhlouf said that more needed to be done to help people switch banks, and that it was within the Central Bank’s power to take action to delay the withdrawals if required.

When questioned on measures to delay the withdrawal of the two banks from the Irish market, due to difficulties in making the switch to new providers, he said: “We can take that sort of action. But let me just say that the answer to this is not for us to just say ‘OK, there’s just going to be loads more time’. The answer to this is to actually get everybody to be working towards the transition but, certainly ,at the end of the day, account holders are not going to be left stranded.

“It’s quite clear that more people need to get on and switch, so I think more needs to be done by everybody. “

john@ellisfinancial.ie

086 8362622

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