600,000 switch banks - but is it enough?
Since the switching guarantee scheme came in, over half a million people have decided to move their accounts, rather than slavishly sticking with the same crap bank for life. That’s according to the Payments Council, who counted 609,300 switches in the six months to the end of March – up 14% from a year ago.
Before the Switching Guarantee, customers were basically held to ransom by their banks. It took 30 days to switch, they would bombard you with tearful ‘please come back’ calls, and it was easier to stick with the same old, same old than venture forth and move your money.
But is it enough to open up the banking industry?
Even so, the Payments Council was delighted with the news. Gary Hocking, its managing director said:
‘By making the Current Account Switch Service quick, hassle-free and removing the fear factor, we've taken away the barriers customers told us they had when it came to switching. There's also been a noticeable surge of advertising activity from current account providers, big and small, suggesting that the new service is helping foster competition and choice for customers.’
But critics say that 14% doesn’t exactly herald a competitive banking market. Consumer Batman Ricardo Lloyd of Which!, is taking a very dim view.
‘Despite an increase in public awareness and confidence, switching levels are still low, suggesting that the new seven-day service is not the game-changer that can significantly increase competition in banking.’
I know what’ll stimulate competition. Barclays’ new and outrageously steep overdraft charges, due to be introduced in June, will have customers flocking to switch to ANYWHERE ELSE.