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Friday 22 August 2014

Consumers 'dread changing accounts'

Published 18/08/2013 | 00:12

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Santander, which is cutting the time taken to switch current accounts, says one in eight people would find a bungee jump less daunting than the changeover

One in eight people would find doing a bungee jump or parachuting out of a plane less daunting than switching their current account provider, research has found.

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The findings from Santander come ahead of a new customer guarantee being introduced from next month which will cut the length of time it takes to switch current accounts and mean that outgoing and incoming payments are automatically moved over.

Santander, which is among the providers which have signed up to the agreement, found that 12% of consumers currently feel that bungee jumping and hurtling through the sky on a parachute is less intimidating than trying to change current accounts.

One fifth (20%) of 2,000 people surveyed this month across the UK said that a trip to the dentist would pose less of a fright and one in four (24%) found the prospect of seeing a doctor or undergoing a blood test less nerve-wracking than swapping bank accounts.

Some 33 bank and building society brands accounting for almost all current accounts in the marketplace have signed up to the new customer guarantee.

It comes into force from September 16 and aims to take the hassle out of switching current accounts and ramp up competition between providers, which use the relationship they have with their current account customers to offer them other products such as cards, loans and mortgages .

The agreement is being overseen by the Payments Council and will cut the length of time it takes to move accounts from up to 30 working days to seven working days.

Payments which are accidentally made to the old account will automatically be redirected to the new account under a "safety net" lasting for 13 months after the switch. Consumers will be refunded interest and charges if anything goes wrong.

There have already been some signs of banks gearing up for the change, with First Direct recently increasing its switcher incentive from £100 to £125 and NatWest/RBS launching a new scheme for customers to earn cash back when they shop using their debit card.

Matt Hall, director of banking at Santander, said: "Switching your current account provider isn't anywhere near as daunting as you might think.

"Banks do all the hard work, moving all your direct debits and standing orders over to the new account."

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