Simon Read: I'm too frightened to switch my bank account, but I will

 

There's a bit of advice that is common to thousands of personal-finance articles. It's simply this: switch. Switch energy supplier if your tariff is too expensive. Switch bank if your charges are too high. Switch savings account if your interest is too low. And so on.

Just last week in this column I had, as regular readers will recall, a bit of a rant about banks ripping us off with poor service and high charges on current accounts.

I ended the piece with a call to arms. I wrote: "We should put pressure on the big banks by switching to rivals."

Now I have a confession. I have remained with the same bank for decades. Not because it offers good service. Far from it. And not because it offers a great deal. Again, the account I have would be, in any terms, some distance from the best-buy tables.

So does that make me a hypocrite? I would hope not. I see my job as pointing out the best deals and shedding light on the rip-offs. If I fail to act on the articles I write, then more fool me. In short, do as I say, not what I do.

But why, knowing that there are much better deals out there, have I not changed bank accounts? After all, I regularly change my energy supplier and mobile firm. So why is a current account different?

Frankly it's fear. I'm frightened that my direct debits and standing orders will disappear and that any new bank will not allow me to dip into the red when I need to. I'm used to the convenience of my bank's online operation and I'm concerned that it could lead to cock-ups were I to move my account elsewhere.

I had a letter from a Middlesbrough reader this week that fed my fears. Jennifer Gregory's decision to switch banks last year left her facing overdraft charges for the first time in her life and, she reports, she's had a bank account for some 50 years.

The problems began with her switch from the Halifax to Co-operative in December when, she says, "my entire balance disappeared and then reappeared after three or four days".

If that wasn't alarming enough, two direct debits then failed, as neither of the bank accounts had money in them to meet the demands. That lead to extra interest charges from her credit-card company for the subsequent late payment when she eventually managed to sort things out.

Next problem was Jennifer's state pension. In late December she discovered that four payments had failed to reach her account, pushing her into the red. The bank blamed the error on the Department for Work and Pensions' being given the wrong account number but, to its credit, agreed to waive the overdraft charges it had automatically added to her account.

I've always suspected that things can easily go wrong when people switch accounts, and Jennifer's story bears that out. Her new bank can, no doubt, easily explain away all the problems and, I'm pleased to say, was understanding about scrapping the charges she faced.

It's quite possible that the fault for the problems lies with neither of the banks. But the fact is that the search for a better bank led Jennifer into a situation which she says gave her "substantial stress". She understandably adds that she will think hard before switching again.

Jennifer's story is one of millions and there are certainly plenty of people who will report that switching current accounts went without a hitch for them. I still hope to add myself to that satisfied list one day, but until I'm confident that I can switch banks without completely messing up my finances, then I'll remain one of the many who, for psychological reasons, are yet to embrace a better banking deal.

Thinking about it, having now aired my weakness, I feel emboldened to confront it. I will look into switching current accounts and will report back on how easy and painless it almost certainly will be.

Which leads me on to another reader, Fiona, who says she was forced to change her bank account. Why? It was because of a series of problems she had with payday lenders when she ended up borrowing more and more money from different companies simply to pay off the debt and growing interest.

Because of the continuous payment authorities that most lenders make borrowers sign, the firms are effectively allowed to help themselves to cash in people's accounts. I've warned about this in the past but, essentially, it means that money people may earmark for rent or bills disappears as it is snapped up by the payday lenders.

To stop that happening, Fiona opened a new account. But then some money owed to her was paid into her old account. Before she could use it to pay her electricity bill this week, lenders beat her to it with Wonga taking £75 and Quik.co.uk £25.

"It's not fair that these people can help themselves without my knowledge," Fiona says.

I agree. It's time we outlawed the mis-use of continuous payment authorities. But how can we control the payday lenders?

s.read@independent.co.uk

Twitter: @simonnread

PROMOTED VIDEO
Life and Style
The veteran poverty campaigner Sir Bob Geldof issues a stark challenge to emerging economies at the Melbourne HIV/Aids conference
health
Arts and Entertainment
Benedict Cumberbatch and John Malkovich talk Penguins of Madagascar at Comic-Con
comic-con 2014Cumberbatch fans banned from asking about Sherlock at Comic-Con
Arts and Entertainment
Chris Pratt stars in Guardians of the Galaxy
filmGuardians Of The Galaxy should have taken itself a bit more seriously, writes Geoffrey Macnab
News
Sir Chris Hoy won six Olympic golds - in which four events?
news
Life and Style
People may feel that they're procrastinating by watching TV in the evening
life
News
Lars Ulrich of Metallica performs on the Pyramid Stage at Glastonbury 2014
people
Arts and Entertainment
film
News
video
Life and Style
tech
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
film
Arts and Entertainment
Up my street: The residents of the elegant Moray Place in Edinburgh's Georgian New Town
tvBBC's The Secret History of Our Streets reveals a fascinating window into Britain's past
Extras
indybest
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Associate Recruitment Consultant - IT

    £20000 - £25000 per annum + OTE £40,000: SThree: Computer Futures has been est...

    Business Analyst

    £300 - £350 per day: Orgtel: Job Title: Business Analyst Rate: £300 - £350 per...

    Trade Desk Specialist (Linux, Windows, FIX, Finance, Networks)

    £60000 per annum: Harrington Starr: Trade Desk Specialist (Linux, Windows, FIX...

    Associate CXL Consultant

    £40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

    Day In a Page

    Backhanders, bribery and abuses of power have soared in China as economy surges

    Bribery and abuses of power soar in China

    The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
    Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

    Highland terriers steal the show at opening ceremony

    Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
    German art world rocked as artists use renowned fat sculpture to distil schnapps

    Brewing the fat from artwork angers widow of sculptor

    Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
    BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

    BBC takes viewers back down memory lane

    The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
    Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

    Nicolas Cage shines in low-budget drama Joe

    Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
    How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

    Make your own ice lollies and frozen yoghurt

    Think outside the cool box for this summer's tempting frozen treats
    Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

    Fiesta is UK's most popular car of all-time

    Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
    10 best reed diffusers

    Heaven scent: 10 best reed diffusers

    Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
    Commonwealth Games 2014: Female boxers set to compete for first time

    Female boxers set to compete at Commonwealth Games for first time

    There’s no favourites and with no headguards anything could happen
    Five things we’ve learned so far about Manchester United under Louis van Gaal

    Five things we’ve learned so far about United under Van Gaal

    It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
    Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

    Screwing your way to the top?

    Good for Lana Del Rey for helping kill that myth, says Grace Dent
    Will the young Britons fighting in Syria be allowed to return home and resume their lives?

    Will Britons fighting in Syria be able to resume their lives?

    Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
    Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

    Beyoncé poses as Rosie the Riveter

    The wartime poster girl became the ultimate American symbol of female empowerment
    The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

    The quest to find the perfect pair of earphones

    Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
    US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

    Meet the US Army's shooting star

    Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform