/ 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.


UPDATE: Due to massive demand, the Co-op has pulled the £200 offer. If you’re with a rubbish bank at the moment then the Co-op is still worth considering though as it has a good customer satisfaction score and is a Which? Recommended Provider for current accounts: http://www.which.co.uk/money/bank-accounts/reviews/current-accounts/page/which–recommended-providers/

Mikhail says:
8 November 2011

My only problem with co-op bank is that I can’t understand if they are mutually friendly, why their fees/charges are considerably higher and the interest rates on savings are considerably lower than in the other banks?

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.