Electric Ireland has expressed concern at the impact that the Central Bank of Ireland (CBI) switching code process may have on the smoothness with which Ulster Bank and KBC customers will be able to move accounts to new banks.
The utility provider told the Oireachtas Committee on Finance, Public Expenditure and Reform and Taoiseach, that the code was not designed for the bulk account switching activity that will arise from the two banks exiting the Irish market.
"This CBI switching code was designed for individual bank account switchers under normal business as usual switching volumes," said Marguerite Sayers, Executive Director at the ESB.
"From our perspective, it would have been preferable if an automated or digital solution were deployed…as we have significant numbers of customers with both KBC and Ulster Bank."
Banks have raised concerns that many direct debit originators, such as utility companies, are not ready to handle the expected huge volumes of requests for amendments to direct debits likely to arise as up to a million Ulster Bank and KBC customers move banks in the coming months.
The CBI switching code, designed to make it easier to move from one bank to another, requires the customer's current bank to write to existing Direct Debit Originators (DDOs) and notify them of the customer’s new bank account details.
But there is particular concern that the switching code is not effective because some DDOs require the customer to confirm the change personally.
Ms Sayers told members that in a normal year, Electric Ireland typically handles around 2,000 direct debit amendment forms from every bank in the market here.
She said Electric Ireland currently has 52,821 customers who pay bills from an Ulster Bank account via direct debit, and 11,573 who use a KBC account, a total of 64,394.
However, Ms Sayers added that some customers have more than one Electric Ireland account that is paid by direct debit from Ulster Bank or KBC, and when this is factored in it brings the total number to 85,916.
The company also has an additional 400 large industrial customers who pay using direct debit from KBC or Ulster Bank.
So far, Ms Sayers said, Electric Ireland has successfully migrated more than 4,000 customers from the exiting banks to the 'new' bank chosen by the customer on their request.
But she said the company is concerned customers may not open new bank accounts and inform it in a timely manner.
"The priority for Electric Ireland is to minimise the potential impacts and inconvenience to our customers by providing a smooth transition and an easy mechanism for customers to update their bank details once they have opened their new bank account," she said.
She also expressed concern at what she claimed was the paper-based requirement of the switching code.
However, a Central Bank spokesperson later said that while the legislative framework for the code requires communication between stakeholders, it does not prescribe the channels or methods of communication.
"The legislative framework facilitates automated and/or manual processes but does not favour one over the other," the spokesperson said.
"Therefore, there is no requirement for all, or any, of the communications between the banks and the Direct Debit Originators to be paper based."
Sinn Féin’s Pearse Doherty asked Ms Sayers whether Electric Ireland was one of those utility providers that requires confirmation from the customer rather than a bank before it will accept a direct debit amendment.
Ms Sayers said it is not and that it facilitates the switching code as it is designed. Customers can also update their details using its website.
She said around 25% of the 4,000 customers who had already amended their direct debits had done so using the code.
The Electric Ireland executive said the company set up a team in January to explore what issues might arise and began a monthly internal reporting process in February.
"Our team stands ready - as the departing banks ramp up their own customer communications regarding the closing of their accounts - to proactively communicate with our own impacted customers to explain how they can update their bank details as quickly and easily as possible," she said.
She said the company will be firmly focussed on ensuring that that are no energy-supply related interruptions for customers as a result of the departure of KBC and Ulster Bank.
She also assured customers impacted that they will not be at any risk of loss of supply should they experience difficulties or delays during the banking transition.
100 staff could be reassigned if backlogs arise she said, as could some of the 400 employees the company has working in its contact centres.