People looking for a new bank are prevented from opening a credit card account and getting an overdraft.
The central bank has been urged to “stick its finger out” and do more to prevent the shutdowns from becoming a “disaster”.
Customers applying for a bank overdraft or card from a new bank face lengthy delays as they have to undergo a credit check. Many will likely be rejected.
In many cases, those who want an in-person appointment can get an appointment weeks and sometimes months away.
The average customer has up to 10 direct debits and standing orders each month that they have to transfer individually to another bank.
Michael Kilcoyne, chairman of the Consumers’ Association of Ireland, said the massive closure of accounts was becoming a “chaos” and called on the central bank to intervene.
“There are obstacles being put in place for consumers to open new accounts and the regulator needs to step in,” he said.
If you want to make a transfer to a bank where you can take advantage of an overdraft facility, you must have your new account for three months before you can even submit an application.
Banks have failed to hire enough additional staff to handle the massive demand for accounts.
Waiting times when calling a bank have become frustratingly long.
Around seven million separate direct debits, recurring card payments and transfers could be affected by the mass migration of customers to new providers.
Three million more transactions are affected by the movement of business accounts, banking sources said.
The process of changing direct debits is manually intensive and depends on the previous bank issuing letters to each direct debit originator to change the details.
It is then dependent on each direct debit party accepting and completing the order.
Labor Party finance spokesman Ged Nash said: “This can be disastrous if not managed properly.
“The central bank needs to stand up for consumers.”
The central bank denied it took any leadership role in the exit of the two banks.
“We are closely monitoring compliance with the expectations we have set and stand ready to take further action as necessary if this transition does not proceed according to those expectations,” a spokesman said.
Governor of the Central Bank Gabriel Machlouf recently admitted that existing and remaining banks are not quite ready for what is likely to be their biggest logistical challenge since the launch of the euro.
KBC Bank will write to its 130,000 current account customers from June, but will only give them 90 days to switch.
Ulster Bank has 360,000 active personal current accounts, 300,000 active deposit accounts and 70,000 business accounts in the Republic.
https://www.independent.ie/business/personal-finance/banking/kbc-and-ulster-bank-customers-are-facing-months-of-chaos-over-new-accounts-41558105.html KBC and Ulster Bank customers face months of ‘chaos’ over new accounts