Who Guarantees What in the 'Current Account Switching Guarantee"?

Question

Someone I know recently used the UK 'current account switching service'. Suffice to say, it didn't go as its supposed to. The old bank account was closed without collecting the direct debits and payees to apply to the new account. I also doubt the 'forwarding' of payments to the old account probably won't find its way to the new.

Aside from the specifics of this case, who guarantees what in this process? A good amount of searching online and I can't really figure out who to approach about this. I assume the FCA ultimately came up with the regulations, and so by extension the Ombudsman is probably the arbitrator. I'm somewhat at a loss as to who's slipped up here, and so not sure who to approach before the Ombudsman.

I'm aware that the guarantee is supposed to ensure that switching accounts won't lose any money (either in the transfer, or via interest payments). However, what other 'failure modes' are guaranteed or otherwise represented in the service?

Answer 1

The party responsible would be the Account Switching Service itself. They are the ones providing the guarantee, so you would be perfectly entitled to go to them claiming compensation under their guarantee.

If you do not get a satisfactory response from them, you can then go to the ombudsman or FCA (or both, depending on jurisdiction). There is no harm (except wasted time) in approaching both even if they do not cover that area of business, as they should be able to tell you quite quickly whether they cover that area or not (and who does).

If you do not have much success online or over the phone, letters in writing can be surprisingly effective, albeit slower.

Answer 2

According to the switching service's FAQ, it's the new bank:

Who provides the guarantee?

As a participant of the Current Account Switch Service, your new bank or building society guarantees your switching process. Bacs, the people behind Direct Debits and Direct Credits in the UK, manage and oversee the service.

Bacs is a separate company that is also responsible for the payments system (money transfers, direct debits and similar), and I guess in theory you might find yourself with a complaint against them. But they don't see to have a complaints process and there also aren't any Financial Ombudsman decisions relating to them, so I suspect it's rare or non-existent.