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PRESS RELEASE

25th October 2005

SWITCHING YOUR BUSINESS CURRENT ACCOUNT
NEVER BEEN EASIER

The Banking Code Standards Board (BCSB) today published findings following a review into the ease of switching Business Current Accounts.

When transferring business accounts to other banks, the Business Banking Code requires subscribers to:

Provide a new bank with details of regular payments within three working days
Close the existing account without any additional charges other than those already agreed
Provide the new bank with a credit history if requested.

When a business account is transferred it is the responsibility of the new bank to make sure that the customer has everything they need to be able to operate the account within ten working days.

We are pleased to report that this review has concluded that in all the banks we visited, the transfer of business bank accounts is given priority. The use of a common information system about regular payments has automated the provision of Direct Debit and Standing Order information and we found that this was always available within the required timescales.

Most of the banks have set up dedicated teams to make sure that accounts are transferred quickly with the minimum of disruption to customers and to sort out problems where they do arise as quickly as possible. We found good evidence of banks co-operating well to ensure that disruption to the business customer during the switch process was minimised.

One area where difficulties are most commonly seen is in the establishment of new direct debits. Many of the problems here however are the result of delays in updating information by the Direct Debit originators and largely beyond the control of the banks involved.

Although the Banking Code guidance already requires banks to use best endeavours to transfer balances in the way that the customer requests, we would recommend that where larger sums are involved, customers consider the use of electronic means to avoid delays in the clearing system.

Seymour Fortescue, Chief Executive of the Banking Code Standards Board said:
“This review does contain some very good news for those businesses who wish to move their bank account. The provisions of the Banking Code, together with the OFT requirements which came into force in January 2003, really have improved the way that banks are performing in this area. We will make sure through our regular monitoring that these high standards continue to be met.”

Media contact and broadcast interviews:
Seymour Fortescue - 020 7397 8252 - 07785 992 453 seymourfortescue@bcsb.org.uk

Website:
www.bankingcode.org.uk (for full text of The Banking Code)

Notes to Editors
Section 7 of the Business Banking Code contains provisions regarding the transfer of business current accounts as follows :-

7.1 If you decide to move your current account to another bank, we will give them information on your standing orders and direct debits within three working days of receiving their request to do this. Also, we will close your account without unnecessary delay when you ask us to do so.

7.2 We will not make any extra charges for either closing or switching a current account except those already agreed with you or agreed at the time you ask us to close or switch your account.

7.3 If you ask us, we will tell you our policy on whether or not we will pay any legal or valuation charges for the transfer of any security to us.

7.4 If you ask us to, we will give your new bank details of your credit history with us.

7.5 If you want to transfer your current account to us, we will tell you how the process for transferring your account to us will work and where responsibility will lie for each step in the process, including:
what information your old bank will pass to us;
what features you will be offered with the new account so that you can compare your new account with features on your old account; and
how long the transfer is likely to take.
We will give you what you need to operate the account within 10 working days of approving your application.

7.6 We will cancel any bank charges you have to pay as a result of any mistake or unnecessary delay by us when you transfer your current account to or from us.

The Banking Code is a voluntary Code followed by banks and building societies in their relations with personal customers in the UK. It sets standards of good banking practice and aims to allow competition and market forces to operate and encourage higher standards of banking practice for the benefit of customers. Copies are freely available from all branches of subscribing institutions, as well as being on the BCSB website, which lists the names of all subscribers, as well as other institutions that the BCSB believes should adhere to the Code but currently do not.

The Banking Code, together with the Business Banking Code, which came into effect on 31 March 2002, has been subject to an independent review by Professor Elaine Kempson, of Bristol University’s Personal Finance Research Centre. Revised editions of both Codes, reflecting Elaine Kempson’s recommendations, became effective on 1 March 2005.

The Banking Code Standards Board (BCSB) was established in October 1999 and is responsible for monitoring and enforcing compliance with the Banking Code. It also offers advice on interpretation of the Code. The independent non-executive Directors of the BCSB are:

Gerard Lemos, CMG, (Chairman): an Audit Commissioner and a Civil Service Commissioner, and Deputy Chairman of the British Council;

Jenny Watson (Deputy Chairman): a director of Global Partners and Associates. Currently the Acting Chair of the Equal Opportunities Commission, and a member of the Advertising Standards Authority's Advertising Advisory Committee. She sits on the Council of the Women's Library at London Metropolitan University, and is a former Chair of Fawcett, a not-for-profit organisation campaigning for equality between women and men.

Sally Hawkins: Equalities consultant and non executive director of University Hospital Lewisham NHS Trust.  Formerly a Member of the Police Complaints Authority and Internal Ombudsman for Cambridge City Council; 

Claire Ighodaro has spent most of her career with BT. The positions she held there included, Programme Director of a major joint venture in Germany; Head of Group Quality; and Finance Director, broadband. She was worldwide President of the Chartered Institute of Management Accountants and she is the co-author "Ethical, Social and Environmental Accountability".

Amanda Jordan, OBE: Chairman of the SMART Company, a consultancy that specialises in corporate social responsibility, Chair of One London (the London Enterprise Agency), a trustee of the Money Advice Trust, and formerly an adviser to the Social Exclusion Unit in the Cabinet Office and Head of Public Affairs at NatWest;

Alan Whiting was Director of Financial Regulation, covering banks, building societies and friendly societies, at HM Treasury. More recently, he was Executive Director, Regulation & Compliance at the London Metal Exchange.

The British Bankers’ Association (BBA), the Building Societies Association (BSA) and the Association for Payment Clearing Services (APACS) are the three industry sponsors of the Banking Code.