Almost one million bank customers will have to change banks in the coming weeks as Ulster Bank and KBC exit the Irish market, with a warning that this could cause chaos.
The Central Bank has told the banks in Ireland that they need to do more to ensure that Ulster Bank and KBC Bank Ireland customers are catered for when the two banks leave the country.
There have been reports of customers having to hang up after being left for lengthy periods on customer service calls while waiting for banking query to be answered.
Labour finance spokesperson, Ged Nash said the Government must step up and protect Ulster Bank and KBC customers ahead of the banks planned exit from the Irish market in order avoid the risk of chaos crippling basic bank transactions.
"Almost a million ordinary bank customers are in the crosshairs with the imminent departure of Ulster Bank and KBC from the Irish banking sector. The Central Bank’s ‘switching code’ is ancient and predates GDPR laws. Banks have let thousands of staff go so it is impossible to have any confidence that the so-called Big Switch will go well for customers," he said.
“I have major concerns that the receiving banks are unprepared for the scale of this challenge and the Central Bank agrees with this assessment.
“We know from a Central Bank study that half of bank customers have reported having to hang up on customer service calls because it takes so long even to get a simple query answered. This was the case before a million accounts had to go and find a new home. Handled badly, the risk of chaos crippling the system is blindingly obvious.
"People have enough to worry about without being kept awake at night by the prospect of a bounced direct debit payment on mortgages or car loans. This ‘Big Switch’ has the potential to kill peoples credit record through no fault of their own. Banking staff are already facing enough stress due to understaffing and additional work as a result of a frenzy of bank branch closures.
“We need to have more capacity in the system, and the government must step up and ensure a firm plan is in place to protect customers, especially those who run the risk of falling through the cracks.
“There is also a real danger that a lack of banking competition will also see interest rates charged by the dominant banks rise even further," he said.
Ireland already has the second highest average mortgage interest rates in the EU, more than double the euro zone average rate of 1.31 per cent, Deputy Nash stressed.
The ECB is now set to raise interest rates this summer, which Deputy Nash said will hammer 450,000 homeowners who will face higher mortgage rates as early as July.
“The Government – and particularly Fianna Fail – must step-up and introduce a cap on variable interest rates. While in opposition, they twice put forward Bills proposing a cap. Now in Government, they must follow through on this promise and protect households from rising interest costs," Deputy Nash said.
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