People with overdrafts can switch bank accounts
22/05/2015
Many people with an overdraft on their current account believe they are unable to switch their account to a different provider, The UKs competition authority has found.
Customers with an overdraft don’t think to look around for a better deal, as they mistakenly believe they are locked out of switching their current account. Many high street banks are happy to accept new customers, even if they are overdrawn.
The research was conducted as part of an ongoing campaign to encourage further competition between UK banks. It showed that 85% of people who have been overdrawn for nine months or more had not switched their current account or even looked around for a better deal. This was partly to do with the fact that customers thought they would be unable to change provider as other banks would not take them on.
There are no regulations that prevent people from switching when they have an overdraft. Some banks or building societies might turn down an application, some might require the overdraft to be paid off but others might agree to take on the debt.
The switch gaurentee means that all current account holder can now switch their bank to another provider within seven working days, including transferring all direct debits and standing orders.
A spokesman for the British Bankers' Association, which represents the UK's High Street banks, said: "All the banks have been working with the CMA as part of this ongoing inquiry. [This] statement takes a positive of view of recent innovations in retail banking and shows that more than 90% of current account customers are satisfied."
Need financial advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
RBS face further IT problems after £56m fine
24/11/2014 Royal Bank of Scotland customers have had problems using credit and debit cards in shops and at cash machines over the weekend. Some customers of Royal Bank of Scotland and its subsidiaries, Natwest and Ulster Bank were affected, and were unable to use debit and credit cards. An RBS spokesperson said the breakdown had "minimal customer impact". It said the problems affected "a...
Read MoreContactless payments introduced on London’s travel network
16/09/2014 Contactless payments will be introduced on London’s tube, tram, DLR, overground and most National Rail services in London from today. Contactless payments work in the same way as Oyster, charging customers an adult-rate, pay as you go fare when they touch in and out on readers at the start and end of every journey. Rather than topping up their Oyster Card regularly, travellers...
Read MoreDo Irish banks now have a competitive edge?
News that the Irish government has guaranteed all bank deposits in the country has led to some rather serious questions across Europe with the European Commission now taking a more of an interest in the situation. Aside from the fact there are many who actually believe that the scheme is illegal many are now starting to ask whether Irish banks have a competitive edge over their European counterpa...
Read MoreThe history of Lloyds Bank
Lloyds Bank has a history which can be traced directly back to 1765 when button maker John Taylor and iron dealer Samson Lloyd set up a private banking operation in Birmingham. However, despite having a history which goes back to 1765 it was not until 1864 that the first branch of Lloyds Bank was opened in Oldbury. Over the years the company has acquired various banking operations around the world...
Read MoreMillions of Lloyds Customers to be transferred to ‘TSB’ Bank
Millions of customers of high street Bank, Lloyds TSB, will soon receive a notice detailing a change in their banking details, as the license behind their account is transferred to Lloyds TSB Scotland. This is the first step in a process that will eventually see these customers switched to TSB Bank, a new bank formed in a deal between Lloyds and the Co-operative Bank. This deal is near conclus...
Read More