Warning over Norwich & Peterborough's 100,000 'dumped' customers

Norwich & Peterborough Building Society have been long-time sponsors of Norwich City

The Yorkshire Building Society's decision to close 100,000 current accounts in the next five months will put customers at risk of errors or even strand them without bank access altogether, other banks have warned.

Rivals say the manual processes involved in taking on this group of customers are too arduous to be completed by Yorkshire's deadline of August 31.

The affected accounts - under the Norwich & Peterborough brand - do not fall within the banking industry's "current account switching service", set up in 2013 to facilitate a speedy, automated transfer process.

Instead, the moving over of customers' direct debits and other instructions to the new account provider has to be undertaken manually. This means savers will miss out on up to £200 offered by banks as an incentive to those who switch using CASS

It also adds weeks to the process and increases the likelihood of errors.

One rival, Nationwide Building Society, said it was having to reject one in five N&P applicants due to inaccurate paperwork being provided.

"We are having to suspend or reject 20pc of applicants from N&P due to insufficient or missing information, which means having to go back to the customer and ask further questions," a Nationwide spokesman said.

"It is a far longer process."

Although 1m current accounts are switched each year, only a tiny fraction of these - approximately 7,000 - fall outside the automated switching service.

To attempt to "rush" 100,000 switches through in a period of five months "is courting disaster", according to another rival bank.

The 100,000 current account customers were bought by Yorkshire in 2011 when it took over the smaller mutual N&P.

Customers were first told in January that they must find a new bank.

The website now states that "all N&P current accounts need to close by 31 August".

Yorkshire said it discussed the closures with the watchdog, the Financial Conduct Authority, and considered negotiating a deal where one or more banks would take over the accounts as a default.

But its mutual status meant this posed difficulties, it said.

Yorkshire's website lists several providers "that have taken additional steps to handle a larger volume of switching than usual".

So far these are NatWest, Metro Bank, Royal Bank of Scotland, Santander and TSB.

A Yorkshire spokesman said it had established "specific channels of communication with other providers so that the teams in both organisations are able to connect  if they need any further information."

He added that letters to customers had elicited a "good response so far with more transfers or closures completed than anticipated at this stage.

“We wrote to all customers in January to outline the proposals. Since then we have sent a formal notification to approximately half of our current account customers confirming they need to close their account by the end of August.

"We will monitor the transfer and closure rate and we will remain flexible on the closure date we set for remaining customers."

After Nationwide, Yorkshire is the second largest building society. It has 3.1m customers and 230 branches.

For those looking for a new current account that pays a top rate of interest, see our pick here.