/ Money

Why I’m not switching my bank

Labrador with calculator and money

My current account provider pays me no credit interest, offers a fairly average interest rate on its credit card and has no branches of its own. And yet, I’m not switching. Why?…

Times are hard for almost everyone at the moment. I pay my salary into my bank account every month and pay my rent almost four weeks later – just before payday, in fact.

I could be earning up to 5% interest in the first year by switching to Santander. Alternatively I could bank with Lloyds TSB and enjoy 2% on my current account balance. But I don’t – and it’s all down to customer service.

Customer service beats interest rates

It’ll probably come as no surprise that I bank with Which? Recommended Provider First Direct. The bank can get away with paying no interest on its current account because its customer service is so good. I wouldn’t want to risk switching to a bank that I know has given poor customer service to many of its customers, even if it does pay significantly more interest on its current account.

Take as an example my experiences last weekend. I lost my debit card on Sunday and rang First Direct to report it.

A real person answered the phone within one ring (no pesky automated menus), dealt with my problem, arranged for a new card to be sent out (it arrived on Wednesday morning) and offered to arrange for cash to be sent to my local HSBC branch if I needed it in the meantime. I couldn’t have asked for a more efficient and friendly service.

Others need to do more to compete

If Santander or Lloyds TSB manage to improve their customer satisfaction scores to match those achieved by First Direct or Smile and maintain the interest rate they pay on current accounts, I’d switch in a shot. It might even prompt First Direct to up the rates it pays.

The Co-operative Bank is certainly running a close second at the moment – a clear ethical stance, £200 to switch and a Which? score not far behind that of First Direct all make it tempting. For now though, the first-class service I received this weekend from First Direct justifies my decision not to switch.

Gerard Phelan says:
5 November 2011

My bank ( RBS UK ) is being sold to Santander, so I have no choice in the the matter. I either do nothing and “enjoy” the worst customer service available, according to Which? surveys or actively move account.

I am dreading it, because the move will be so much hard work with many likely points of failure.
I do not mean the direct debits and standing orders – which are easy enough for the “system” to identify and change. It is all the other connections that no-one else can identify and reassign for me.

Firstly there are direct credits, from dividends and interest paying savings accounts.

Secondly there are the dozen or so savings accounts for which the RBS account is the “nominated” account required by the savings account for electronic funds transfers. I have never changed or even used some of them since setup and reasonably I expect the other party to have strong security processes over changing the details – which will make change all the harder.

Thirdly there are all those third parties whose bills I now pay using direct transfer when on-line. With RBS they were setup slowly over time, but it was troublesome to get the correct destination account details which sometimes seemed to differ from the published accounts. With RBS there were additional foibles, such as new accounts added by the phone service not being usable by the on-line service. A new bank will have its own quirks to be learned through painful transaction failures.

Finally, there is the question of incoming physical payments. Some remote banks may have excellent customer service, but can you pay in cheques? Another quirk with my RBS is that there is no branch where I live and I normally paid in cheques through NatWest. When I received a large cheque from a solicitor they declined to accept it, insisting I must visit a branch of my own bank, which was most inconvenient. So something else to find out and build into the evaluation criteria.

Hence I am dreading the move and have so far done nothing about making it happen.

A worker says:
8 November 2011

First Direct are superb, and being part of HSBC, the large branch network can be used for paying in.

Howard says:
9 November 2011

In the words of an old TV series- don’t panic!

My bank Alliance & Leicester has been acquired by Santander and I had a whole gamut of transactions set up in my account and I have not encountered a single problem. This is particularly impressive as A&L inherited and retained the odd sort and account codes from my original bank GIRO Bank on its takeover.

Give Santander a chance; I mainly do internet banking and Santander’s web site is superb making others like Smile’s look like positively archaic. On the rare occasion I do visit my preferred high street branch, despite being in one of London’s busiest markets, I find the staff very pleasant and knowledgeable with someone always on hand to help if you have a query..

Wow a positive review for Santander!

Although the back office customer service in the bigger banks has proved troublesome to me at times, I have founfd local *small* branch service exemplary.

I have switched banks for several reasons over the years. Invariably the swap to a new bank (or in some cases arranging a supplementary account in another bank) has been driven by service – or lack of it.

Emily says:
7 November 2011

I recently switched to First Direct, and in the process of switching, I was required to call up the customer service line to finalise the setup of the account.
When someone answered after just one ring I actually hang up in shock.
I called back later once I’d recovered, and found it to be a quick and plesant experience dealing with the bank – which made a nice change (I’d love to find a reasonably price utility provider like this!)

John Hulett says:
7 November 2011

Unlike Martyn I was tempted by the interest rate and other attractions of a Santander account and decided to switch fully knowing the low satisfaction rating which your readers have given the bank. There have been times in the last three months (yes that’s how long it’s taken) when I have regretted it. My current account was with Citibank, not one that Which has reviewed as far as I am aware. They used to give good service but have been very slow at introducing ‘faster payments’ (they still haven’t) and also started charging for using the debit card abroad (£5 a time) when withdrawing cash. It was impossible to talk to anyone in this country as all calls were channelled through an Indian call centre and sound quality was always very poor. As a mortgage holder with santander I was entitled to their ‘zero’ account which offers no charges for using your card worldwide. It was also offering 5% interest for the first year.
When I contacted the bank at the end of July to set up the switch things started to go wrong on the second day when their ‘underwriters’ refused my present free overdraft of £500. No explanation was given despite the publicity saying that they will match the overdraft of your present bank. I challenged them about this and said I would appeal. I even obtained my credit rating for them which was 998 out of 1000! They asked for copies of bank statements and proof of my overdraft! This despite the fact that I pointed out (as it says on Citibank’s website) that all their customers receive this. The overdraft was finally approved in mid October!
Most of the problems arose over switching direct debits. They claimed that Citibank were not responding to their advances. As a result all my direct debits continued to be charged to an account that now had no money in it as I had done my bit and transferred my income to the new account. When I contacted Citibank they said that they had heard nothing from Santander. In this position of course you are helpless as it is one person’s word against another. This took two months to sort out. The main problem was the lack of communication between members of Santander’s switching team. Every time I phoned I talked to someone different and they seemed unable to call up the information from previous calls. They also managed to lose much of the first round of information that i sent to them through the post. It wasn’t until I lodged a complaint that I was assigned one person to sort everything out. To give Santander their due, things did at this point start to happen. They made a small ex-gratia payment in lieu of all my time and telephone calls and they fully re-imbursed all the penalty charges that I had received because of reversed direct debits.
This experience gives some insight into why people are so reluctant to switch bank accounts. It needs to get better.
The online experience with Santander is good. Their website has good security as far as I can tell and account details are very clearly presented and easy to manage.

Mikhail says:
8 November 2011

Yeah I have the same opinion, very hard to establish, but very easy to manage after, xD until the next problem, there is nothing to worry.

My current account used to be with Santander. I also had a savings account with Bradford & Bingley [then already part of Santander]. When the bonus interest rate with the B&B account came to an end, I tried to move the money to my Santander current account. I was told I couldn’t do it on-line, then I was told I couldn’t move it using their phone service, and finally was told to visit a branch. When I did, they were also unable to move the monies!
Eventually I lodged a formal complaint in writing and the money was moved. The problem apparently was that the B&B accounts had too many ‘digits’ in their account numbers.
My current account is now with First Direct— Wonderful !

Patrick says:
11 November 2011

Banking with Alliance & Leicester that was taken over by Santander been downhill all the way since that happened.

First chance i have will resign them to trash can and move on to either First Direct or Co-op unless someone knows different.

Heather says:
18 November 2011

As a First Direct customer for many years I cannot fault them and would never change banks again. What I found brilliant was the order in which they input transactions to your account. On one day I had 5 debits going out and 1 credit going in. If they had entered the debits first I would have become overdrawn. The same situation happened about 25 years ago with Lloyds and I was charged a fee. So well done First Direct.

HI by Martyn,
I too am a First Direct customer and I both concur and attest to the fact that their customer services are phenomenal. In there years of being a customer the few problems that I’ve had have been resolved swiftly, painlessly and with the professionalism I have come to expect from First Direct. That said I had no complaints with the 18 years I was with either Halifax or Natwest who both provided exceptional customer services.

That said for a bank that has no physical presences, First Direct’s website, usability and user experience on the site does lead a lot to be desired. There are a number of factors that the bank has not and persistently fails to address. If you check out their new labs pages http://www.lab.firstdirect.com/ (a good idea which is let down by it’s website design and lack of follow-up and comment on suggestions) you’ll see a myriad of requests for basic things like the ability to change account names, delete old payees, amend standing orders prior to the first payment etc. Other requests include Internet Bank Plus to support Apple (difficult because of the use of ActiveX), better internet banking for mobiles or banking App that works on handsets and devices other than Apple. There have been also been a number of requests to download First Direct branded Pdf statements (particularly useful when a person opts for a paperless account), tracking facilities similar to those offered by Lloyds, Love Money, Money Dashboard and the like and a better Labs site.

In brillant First Direct fashion, when I sent a 10 point email expressing my disappointment, I got a letter addressing each of the points in turn, in which First Direct explained unequivocally that it would not be introducing any changes requested for the website in the foreseeable future, or indeed any of the popular requested I’d inquired about and which were on the Labs.

So whilst I love First Direct, I think it’s main device for accessing the Bank i.e (it’s website), is languishing in the dark ages!!!

I sometimes find a phone call is quicker than the internet for the more complicated “linked” transactions.
One of the big pluses about First Direct for me is that there is no limit on the amount to be transferred using BACS although a phone call is necessary. Many banks have a limit of under £10k or insist on using CHAPS for a fee. Very useful when shuffling savings around between providers.

MsSupertech says:
26 November 2011

I get a negligible amount of interest from my Smile account but the customer service is excellent. Having banked with Barclays many years ago, then the old Abbey National I wouldn’t dream of choosing interest over service for a current account.
On the other hand I sweep any surplus cash into an instant access on-line savings account regularly so I don’t miss out too much.

Steve says:
12 July 2012

frustrated with first direct and their misleading £100 incentive to switch bank account to them.
I’m told it’s only open to customers who haven’t banked with them before. fair enough I thought until they explained ‘banked’ to them means a previous customer of any product, not just an ex-current account customer. I could understand excluding those who have had their current account facility before. However I had an e-ISA a few years back. So I had only ever saved with first direct. never have I had a current account which to me is what banking is in terms of an account to handle daily finances.
So there I was ready to make the big switch knowing it would be a little inconvenience and hassle to move banks in that you fill in forms and have to let employer know new details, whilst making sure there’s enough in the old account to cover DD/SO instructions that are taking time to switch over. For me the £100 incentive is compensation for switching process. Without it I just won’t switch unless my bank does something terribly wrong. It hasn’t. It’s just service isn’t what it used to be.
So I contacted FD slightly annoyed about their terminolgy being misleading. They say they will get the marketing people to look at it. If they want to exclude all previous customers then say ‘excludes any previous customer holding any of our accounts’ rather than the vague ‘banked’ term being used. So I think on this occasion FD don’t live up to their reputation of fairness and clarity. Thumbs down at this time.

richard says:
5 February 2013

I’m a massive First Direct fan – I joined over 20 years ago and never regretted it – Changing Banks was seamless and fast. I joined when I found “sundry charges” that Midland Bank would not explain. First Direct is open – fast – and polite at all times.

Ollie says:
19 May 2013

I have just switched to First Direct from NatWest, for me it was a no brainer.
The fact that NatWest gave me a £1000 overdraft years ago, but have now turned round and said if I go more than £10 into it, il be charged £6 a month was the push i needed.
Don’t get me wrong, I don’t go into my overdraft much, its just nice to not have to have the stress of making sure there’s enough money in there just before pay day. I often only go £20 to £30 overdrawn which would mean £6 charge, plus their customer service is rubbish, and every time I go in there they keep doing ‘account reviews’ which consists of me sitting there for 10 mins with a member of staff trying to sell me paid for bank accounts!
First Direct on the other hand are superb in every way. £100 to switch, £250 interest free overdraft, applied on-line on Monday and my bank card hit the door mat Wednesday morning! Phoned up Monday evening to finalise setting up the account, phone was answered in one ring!
Thought I would have to wait a week to get my on-line banking access sorted but they did it there and then on the phone within hours of me applying on-line.
They speak to you like your a human being on the phone, rather than going through the scripted motions, lack of interest and robot like conversation I get from other banks.
I agree the website is a little basic compared to other banks, but I can do everything I need to on it so doesn’t bother me too much.
The switching service worked fantastic, I was informed what was happening, and when.
If everything remains a good as it has so far, it will take me a lot to ever contemplate going back to another bank again.