Switching services between bank accounts
If you are a consumer with a bank account, you have the right to switch services between accounts. To learn more, read on. You can also take a look at the accompanying infographic (video and printable version) and Memo.
- How to apply to switch accounts
- What are your rights?
- How to make an informed decision
- If something goes wrong
'You have the right to switch services between accounts'
You have the right to transfer all or some of your payment
services and positive balance to another account or another bank, choosing whether to maintain or close your old account.
Switching is an easy procedure that should take no more than 12 working days to complete.
To make things simple, we will refer to the two accounts (original and recipient) as the 'old' and 'new' accounts and the two banks (original and recipient) as the 'old' and 'new' banks.
Did you know that ... the term 'payment account' refers to bank current accounts, postal current accounts and any other product that allows you to perform key payment transactions (making deposits, withdrawing cash, ordering and receiving payments and using payment cards). The generic term 'bank' refers to all entities authorized to offer payment accounts: banks, Poste Italiane (Bancoposta), payment institutions and e-money institutions.
Be careful: Portability involves switching services, not accounts
Asking to switch services does not mean that your old account will be closed automatically: if you want to close your account with your old bank you cannot have any outstanding obligations on that account and you must specifically ask that the account be closed in addition to requesting that services and/or balances be transferred.
The transfer is made to an existing account or new account with another bank. Switching to a new account does not mean that the account itself (and its IBAN code) is moved from one institution to another, but rather that the payment services and balance are transferred to a different account with its own IBAN code.
If you close your old account, remember to use the new account's IBAN code once the switch is made.
Carefully read the information here to better understand and exercise your rights. Your bank must also provide you further information and help upon request.
You can ask to switch to another account if you are a consumer and have a payment account with a bank located in Italy.
Did you know that ... the term 'consumer' refers to an individual acting for purposes unrelated to any professional or business activity.
The simplified switching procedure can be used when the new account is:
- opened with a different bank located in Italy
- is in the name of the same account holder(s)
- in the same currency as the old account.
'You can always ask to switch to another account'
You can always ask to switch to another account, even if:
- your old account is overdrawn: this does not stop you from transferring recurring payment services to another account
- you have a mortgage or other loan: having a loan with your old bank or another lender does not mean you cannot switch or close your account because, when you ask to switch, you can authorize the old bank (or other lender) to directly debit the new account for future instalment payments
- you use ancillary services that are connected with the account (e.g. an insurance policy).
'The switching procedure cannot be used in some cases'
When the new account is held with the same bank or with a bank located outside of Italy, it is still possible to transfer payment services and the balance from the old account, but the switching procedure cannot be used. In any case you can ask the banks for information and help in making the transfer.
If you want to open a payment account in another EU country you can ask your old bank for assistance. You can request that it transfer your balance to the new account, but you must provide the name of the new bank and the new account's IBAN code.
The switching procedure also does not apply when, regardless of your wishes, the bank with which you have the account transfers in bulk its own customers' accounts to another bank in a group, including yours (this happens, for example, when a bank or bank branches are sold). The Bank of Italy will issue regulations for these circumstances to ensure continuity of service for consumers whose IBAN code changes or whose payment service instruments (e.g. payment cards and cheques) are replaced.
'You can transfer recurring payment services'
You can transfer some or all recurring payment services to the new account, such as:
- direct debits, e.g. utility payments or mortgage instalment payments
- recurring electronic fund transfers to your account, e.g. salary payments
- standing orders for automatic fund transfers to others, e.g. rental payments.
Remember that some direct debits - for example, those for some credit cards and for the Telepass automatic toll payment service - cannot be transferred using the portability procedure, but instead require another process. The new bank must notify you of this and help you take the necessary steps. Payments initiated by the National Social Security Institute (INPS) cannot be transferred to the new account through the portability procedure either. The old bank and the new bank are always required to inform you of this. However, you need to be careful, as transfer times for INPS payments may be longer than those for other payment services.
Be aware: Remember to take a few precautions, including for your cheques
Remember that, if your account has non-sufficient funds, the transfer could result in a default, with its negative consequences (including, for example, the imposition of penalty interest or charges). Therefore:
- if you transfer all your direct debits, make sure that the new account has sufficient funds to cover them
- if you transfer only a part of your direct debits and keep the rest on your old account, you must make sure that you have sufficient funds in both accounts
- if you decide to keep your old account but transfer your balance to the new account, remember that all the obligations connected with the old account are still in effect, including the payment of bank charges debited on the account.
Be very careful with your cheque book, too, since cheques cannot be written without authorization or sufficient funds to cover them (for more information see the section on this topic):
- if you want to transfer your balance to the new account, check whether you have written any cheques on the old account that have not yet been debited and for which the time for presentation has not expired: if your account does not have the funds necessary, the cheque will be dishonoured due to non-sufficient funds. Remember this when choosing the switch data (see below, How to apply to switch accounts)
- in any case, if you have decided to keep your old account, make sure that it has enough funds to cover any cheques, otherwise they will be dishonoured due to non-sufficient funds
- if you decide to close your old account, remember that any cheque written against the account will be dishonoured.
'You can ask your bank directly to switch accounts'
You can submit your application to switch accounts directly to the new bank, which must make the switch as required by law with the cooperation of the old bank.
To submit your application, which also serves as authorization to make the transfer, fill out the form provided by your bank (such as that found at www.sepaitalia.eu).
If the account is held jointly, the application must be signed by each co-account holder.
Be aware: Keep an eye on the process
The new bank is responsible for obtaining all the information needed to smoothly transfer the debits and credits to the new account. For example, it must obtain precise information on your employer fund or any utility companies in order to give them your new account IBAN code. To help this process along, you can provide this information.
As a general rule, once the application is submitted, keep a close eye on the process and check that all debits and credits have been correctly switched to the new account.
'Indicate the switch date in the application'
In the application you must indicate the 'switch date', i.e. the date as of which you want the payment services to be active on the other account. The date must be at least 12 working days from the date on which the application to the new bank is made (see below, How the deadline for completing the procedure is determined).
The switch date marks the dividing line between the old account and the new: up until the day before this date, recurring credits and debits will be made on the old account and as of this date they will be made on the new account. If you have requested a balance transfer too, the switch date is very important because it marks the moment as of which the balance will be available on the new account.
'The switch must be completed in 12 working days'
The switch you have requested must be completed within 12 working days.
If this deadline is not respected, you have the right to monetary compensation (see below, If something goes wrong).
Be aware: How the deadline for completing the procedure is determined
The time starts from the moment the new bank receives your application containing all the information and documents needed to carry out the transfer. Therefore ,if any information, documents or other requirements for which you are responsible, the time starts to run once the application is considered complete and all the requirements are met. The 12-day period covers working days (i.e. Monday through Friday), excluding any holidays that fall during the week.
Here's an example: if you submit the application form with all the information and documents required to the new bank on Friday, 11 August 2017, and have satisfied all the requirements on that date, you have to count 12 working days starting Monday, 14 August; since Tuesday, 15 August, is a holiday, so the switch must be completed no later than Thursday, 31 August 2017. In the application you can indicate 31 August 2017 or a date thereafter as the switch date.
'No fee may be charged for switching accounts'
Neither the old bank nor the new can charge you a fee or impose any other penalty for switching accounts.
'The two banks must ensure continuity of payment services'
Starting from the date you have indicated (which, as stated, must be at least 12 working days after the application submission date), the new bank must guarantee that you will have access to the payment services you wanted transferred and to the balance on your old account.
The old bank, in turn, cannot engage in practices that prevent you from exercising your choice: it must ensure that you receive continuity of payment services until the day before the switch date; it cannot put a block on payment instruments linked to your old account (e.g. payment cards and cheques); it cannot make switching accounts conditional on the return of these instruments (as to cheques, see the warnings above).
Upon request, the old bank must ensure, for no additional fee, that any incoming electronic transfers of funds to your old account be re-routed to your new one for a period of 12 months (see box).
Be aware: What happens to individual incoming electronic fund transfers received in your old account
If you apply to switch accounts, you can also ask your old bank to automatically re-route for free any electronic transfers of funds received on your old account to your new account for 12 months following the switch date.
If you do not specifically request that they be re-routed or, if you had requested it but the 12 months have expired, the old bank can refuse to transfer the funds but is still required to promptly inform the person or entity that ordered the electronic funds transfer or you (as beneficiary) that the transfer was unsuccessful.
'You can apply just to switch accounts or to switch and close the old account'
You can apply to switch accounts and to close your old account in the process. The law states that consumers have the right to close an account at any time without any closing fees or penalties.
You can include the request to close your account in the application to the new bank; in this case, the deadline that applies to switching accounts also applies to the account closing process.
Be aware: The right to close your account is not absolute
When it is not possible to close the account (e.g. because it is overdrawn) the old bank must promptly inform you that the account cannot be closed but must nonetheless do everything necessary to transfer the payment services by the deadline set, without additional costs or conditions.
In any case, you can ask the old bank to specify what you have to do to close the account and, if possible, the time frame within which this can be done.
'You have the right to information and assistance'
When you ask to switch accounts, both the old and new banks must assist you in correctly starting the process and must work together to complete it.
All banks and other payment services providers are required to provide consumers with information about switching accounts at no charge. If you are considering whether to change banks or transfer all or some payment services to another account, the banks' staff must give you all the information and, when you have decided, must help you fill out the application form and start the process.
'Exercise your right to make an informed decision'
Before switching accounts, and even more so before switching banks, make sure that you have really found an account that is better suited to your needs and/or is less expensive. How do you do this?
- consider carefully the costs that you currently pay and your needs (e.g. the services you need, the number of transactions you usually perform)
- compare the services and costs of other products on the market by reading the disclosure forms and looking at the account fees and charges
- gather all the information that you need to make your decision, contacting the banks directly if needed.
'Consider the consequences of switching'
Consider the consequences, advantages and possible disadvantages of your choice. For example, if you have a securities account (i.e. a financial instrument custodian and management agreement) linked to your current account, check with your bank about what happens if you switch the linked account and how to transfer the securities account to your new bank, if desired.
Keep in mind that closing your account could mean that you lose the right to ancillary services associated with the account (e.g. an insurance policy) or favourable terms and conditions for the old bank's other products (e.g. a loan). Check your contract and ask the bank for any clarification needed.
'In the event of delays or problems you have the right to automatic compensation and you can protect your rights'
If the transfer is not completed on time, the mere fact of a delay gives you an automatic right to compensation of €40, plus interest for each day of delay based on your old account balance.
The penalty must be paid immediately by the bank responsible for the delay (you do not have to request it or make a formal complaint).
The penalty interest is calculated by applying the usury ceiling rate for the reference quarter to your account balance at the time the application to switch accounts is made and multiplying the result by the number of days of delay divided by 365.
Did you know that... the usury ceiling rates are provided for by anti-usury legislation and are published quarterly by the Ministry of Economy and Finance and the Bank of Italy, broken down by loan type category and amount bracket (link).
Here's an example: Let's assume that the available balance at the time the application is submitted is €8,000, that the usury ceiling rate for the reference quarter is 27% and there is a delay of 7 days; the compensation in this case would be €81.42, calculated as follows:
€40 + [(usury ceiling rate x balance) x (days of delay : 365)], that is:
40 + [(0.27 x 8,000) x (7 : 365)] = €81.42
In the event of delays or problems you can submit a written complaint to the banks.
If you are still unsatisfied after submitting your complaint, you can protect yourself by turning to alternative dispute resolution systems, including the Banking and Financial Ombudsman (ABF), or the courts.
If you have already received automatic compensation for delays or disrupted service, this does not preclude taking action to obtain compensation for any other damage that you have suffered, including that of a non-financial nature.
In general remember: if you believe that the banks are not fulfilling their obligations and duties described herein or have engaged in malpractice, you can report it to the Bank of Italy by submitting a complaint.
For more information on the most popular banking and financial products and to learn about your rights, consult the Bank of Italy Guides.