SUMMARY OF THE AUTOMATED SWITCHING PROCESS
AND ABBEY NATIONAL'S RECOMMENDATIONS
There are a number of parties involved in the
the "existing" bankwith
whom the customer already has a bank account;
the "new" bankto
which the customer wants to switch;
company receiving payment via Direct Debits; and
BACSthrough which payments
move and which provides electronic mail boxes for originators
to retrieve account details.
Speeding up the process requires ensuring that
each stage in the process takes place within the timescales agreed.
Abbey National is calling on BACS to implement
a set of guidelines for speeding up transfers and making the process
more predictable. We attach a chart demonstrating the various
stages of the process and summarising our recommendations for
improving each stage. These recommendations are:
Implement the full use of electronic communication
as outlined in Phase 4 of the BACS Switcher Automation programme.
Currently, much of the information exchange is paper-based, but
ensuring that all details are conveyed electronically would eliminate
many of the delays and improve reliability. BACS will be considering
a proposal to implement this phase in 2004 at the earliest; Abbey
National believes it should be implemented sooner.
Improve the quality of data provided by existing
banks. Currently, the existing bank supplies a comprehensive
list of mandateseg, Direct Debits and standing ordersthat
includes some items that are no longer active. This practice is
unnecessary and causes delays and customer confusion. We recommend
that the existing bank provide details of the last date each Direct
Debit was used. This will indicate the likelihood that the Direct
Debit is still relevant to the customer.
Apply structured service standards to speed
the response by "originators" of Direct Debitsthose
companies being paid through the Direct Debit process. Currently,
the Direct Debit scheme says that all requests to change a Direct
Debit must be actioned within three working days following receipt
of the request. This standard is not being followed, and there
is no penalty if originators do not comply.
Originators are notified of the need to change
a Direct Debit in either of two ways:
large originators will have an electronic
mail box at BACS. If requests are not opened within three working
days of receipt at BACS then they are forwarded on automatically
by BACS through the post; and
small originators don't have an electronic
mail box, but requests are forwarded on by BACS automatically.
This adds two working days to the process.
In the current guidelines, the three working-day
"clock" does not start ticking until originators retrieve
the notification, rather than when the request is posted.
We recommend that:
for large originators, the turnaround
time begins when the notification is received in the BACS mailbox.
Further, large originators should not be given the option of receiving
requests by post, which adds further delay. This should in turn
motivate them to access their mailbox daily; and
small originators should be given
five working days to respond from the day the notice is received
Finally, we are recommending that BACS put a
structure in place for monitoring and penalising Direct Debit
originators who fail to comply with service standards. BACS should
make the information about originators' compliance records public.
The process and Abbey National's recommendations
are summarised in the following chart.