More than a million KBC and Ulster Bank customers face chaos as they try to switch accounts while the two institutions leave Ireland. People seeking a new bank are being blocked from opening a credit card account and getting an overdraft facility. The Central Bank has been urged to “get its finger out” and do more to stop the closures turning into a “disaster”. Customers applying for an overdraft or a card with a new bank are encountering long delays as they have to undergo credit worthiness assessments. Many are likely to be refused.

In many cases, those wanting an in-person appointment are being given a date weeks and sometimes months away. The average customer has up to 10 direct debits and standing orders a month, which they will have to transfer individually to another bank. Michael Kilcoyne, the chairman of the Consumers’ Association of Ireland, said the massive shut-down of accounts was turning into “chaos” and urged the Central Bank to intervene. “Obstacles are being put in the way of consumers opening new accounts and the regulator needs to step in,” he said. 

Those seeking to transfer to a bank where they can avail of an overdraft need to have operated their new account for three months before they can even apply.

Banks have failed to hire enough extra staff to cope with the massive demand for accounts. Waiting times when phoning a bank have grown frustratingly long. Around seven million separate direct debits, recurring card payments and credit transfers could be impacted by the mass movement of customers to new providers. Three million other transactions are impacted by the movement of business accounts, banking sources said. The process to amend direct debits is manually intensive and dependent on the previous bank issuing letters to each direct debit originator to change the details. It is then dependent on each direct debit originator accepting and completing the instruction.

Labour Party finance spokesman Ged Nash said: “This has the potential to be catastrophic if not handled properly. “The Central Bank needs to stand up for consumers.” The Central Bank denied it was failing to provide leadership on the exits of the two banks. “We are closely monitoring compliance with the expectations we have set and we are prepared to intervene further, if necessary, should this transition not proceed in line with those expectations,” a spokesperson said. Central Bank governor Gabriel Makhlouf conceded recently that the existing banks and those that will remain are not entirely ready for what is set to be their biggest logistical challenge since the introduction of the euro. KBC Bank will begin writing to its 130,000 current account customers from June, but will give them only 90 days to switch. Ulster Bank has 360,000 active personal current accounts in the Republic, 300,000 active deposit accounts and 70,000 business accounts.

Source: Charlie Weston, Irish Independent 

How we help

We can help take the effort out of this for you by demonstrating how this would work for you and your family and providing you with one cohesive Financial Plan.

You can arrange a meeting by clicking here to access my diary, email or alternatively, call me on 087 8144 104.