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Tesco Bank switches delayed as it struggles with demand after revealing plans to close its 213,000 current accounts

Tesco Bank switches delayed as it struggles with demand after revealing plans to close its 213,000 current accounts

Tesco Bank is temporarily declining requests from some existing customers to switch their current account to a new provider. The supermarket giant says it's struggling after being inundated with requests to switch following its announcement last month to close all of its 213,000 current accounts by 30 November 2021. 

The bank wouldn't give a timescale for when it will start processing ALL switch requests again or tell us how many customers have had switch requests denied or why this only impacts certain users - although it adds that it could be related to its capacity to process switches on any given day. But the bank adds that customers can continue to use their accounts as normal in the meantime.

Tesco Bank announced it would close its current accounts on 26 July. Here's what the switching problems mean for you:

  • Requested to switch away from Tesco Bank before 30 July? Switches will have been processed as normal. So there's no problem here and switch requests will go through in the usual timeframe of within seven working days. 

  • Requested to switch away from Tesco Bank on or after 30 July? Your switch may have been declined. If your switch is rejected, you'll receive a text telling you and you'll get a second text informing you when you can re-submit your request for your chosen bank.
  • Not yet requested to switch? Your application may be denied. Tesco Bank is temporarily asking customers not to request a switch to a new bank - if you do, it may be declined. Keep an eye on Tesco Bank's website for when it will be able to process all new switch requests without delay.

Many customers took out the account to benefit from in-credit interest but Tesco Bank stopped paying this in September last year. Tesco Bank had already closed the current account to newbies in December 2019. For full help on picking a bank account, including our current top picks, see our Best Bank Accounts guide.

You can complain if you're unhappy about the delay

The problem with the delay is that Tesco Bank customers could miss out on perks to switch elsewhere. Since 26 July, top bank account switching offers have already been pulled, including a free £100 to switch to First Direct and a free £125 to switch to HSBC.

HSBC, meanwhile, has since launched a new offer that gives customers switching to its Advance account (via MoneySavingExpert or MoneySupermarket) a free £140 but here you must apply by 19 August and switch within 30 days. So it's unclear yet if Tesco Bank customers will be able to take advantage of this in time.  

If you've missed out on a switching incentive and you're unhappy about the delay, you can take your complaint to Tesco Bank and ask if it will look into the impact the delay has had, including any missed incentive. Tesco Bank says it will deal with complaints on an individual basis but we've heard reports of some customers receiving a £50 credit into their account. However, Tesco Bank has warned that making a complaint will NOT speed up the switching process. 

If you are unhappy with Tesco Bank's response or it takes longer than eight weeks to reply, you can take your complaint to the free Financial Ombudsman Service, which may force Tesco to compensate you for any inconvenience the delay to switching has caused. See our Financial Ombudsman – your rights guide for more. 

If you don't want to wait to switch you can close your account

Switching to a new provider is likely to be the easiest option (once the service is back up and running for all users) for those using Tesco Bank as their main bank account. The Current Account Switch Service ensures all direct debits, standing orders and incoming payments are moved over to your new account, along with any funds held in your account within seven working days. Once you switch, your Tesco current account will automatically close.

Alternatively, if you're unhappy about the switching delay or you use the Tesco account as a secondary account or as a savings pot, you may prefer to close it instead. To close the account, you'll need to have a zero balance, so if necessary withdraw any funds first. Once your account's empty, you can close it by calling Tesco Bank on 0345 366 8818. Tesco told us you could also transfer your balance to a Tesco savings product or Clubcard Pay.

When your account's closed, any regular payments will be automatically cancelled, so make sure anyone you make payments to or receive them from has your new banking details. Also bear in mind that most current account offers are only for those who switch and not for those simply taking out a new account.

What do Tesco Bank and the Current Account Switch Service say?

A spokesperson for Tesco Bank said: "Since we announced our current accounts are closing, we’ve received a high demand for current account switches, leading to delays for some customers. We’re contacting all customers affected to apologise for this temporary issue."

A spokesperson for the Current Account Switch Service, which is owned and operated by Pay.uk, said: "We are working closely with Tesco Bank as it seeks to resolve the issues some of its customers have had as they try to switch to new current accounts." 

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