Economics

Account Switch

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Key facts at a glance

Account Switch. If a consumer changes his payment account, he must regularly ensure that his payment obligation continues to be served properly and that payments continue to reach him. In order to keep the effort for this low, both payment service providers involved in the switch have to support consumers on request. On the one hand, this is the receiving payment service provider, who will in future manage the account and therefore receive the data, and, on the other hand, the payment service provider, who has previously managed the account and transfers the data to the new payment service provider. In order for the receiving payment service provider to initiate the statutory account switch, the consumer must issue an authorization. There are a little points that consumers and payment service providers need to consider in order for the account switch and the support of the payment service providers to go smoothly.

Who is obliged to provide legal assistance in changing accounts?

In principle, every payment service provider who offers consumers payment accounts is obliged to help with changing accounts.

Both payment service providers involved in the change must provide support, the receiving payment service provider on the one hand – i.e. the payment service provider who will in future manage the account and therefore receive the data – and the transferring payment service provider on the other hand – i.e. the payment service provider who has previously managed the account and the data to the new payment service provider transmits. The receiving payment service provider initiates the account switch at the request of the consumer.

What should I  do to make use of the legislative switch account assistance?

You must be a customer and allow the payment processing provider to provide the contractual transfer account assistance. Authorization for adjustments to the contractual account aid must be rendered in writing. If you would like to take advantage of the legislative switching assistance account, please use the one form offered. The receiving payment service provider shall execute an account transfer at the behest of the user. So, you can get the form from the payment processing provider for whom you would like to use the account transfer help or on their website. Use of the form is not necessary, but it simplifies the process and ensures that you consider all points.

Which services are covered by the statutory account switch assistance?

The authorization of the consumer defines which specific services the payment service providers provide within the specified framework.

The payment service provider with whom the account is to be managed in the future requests the following information from the previous payment service provider within two business days based on the authorization:

  • a list of the current standing orders and the details available from the conversion of direct debit mandates to the payment processing provider that is passed when the accounts are switched;
  • the available information on incoming transfers and direct debits initiated by the payee on the consumer’s payment account in the previous 13 months.

The new payment service provider also informs the previous payment service provider of the times specified in the authorization at which payments are no longer to be processed via the existing account, the remaining balance is to be transferred and the previous account is to be closed. The previous payment service provider must provide the consumer and the new payment service provider with the requested information within five business days. In addition, from the point in time specified by the consumer, he no longer has to process payments (standing orders / direct debits) , transfer the remaining balance to the new account and close the account.

The new payment service provider must then provide the following services within a further five business days after receiving the lists and information, insofar as the authorization provides for this:

  • set up the desired standing orders and execute them from the date specified in the authorization,
  •  Accept direct debits from the time indicated in the authorization;
  • the payers named in the authorization who make transfers to the previous payment account, provide the details of the new payment account details and send the payers a copy of the relevant authorization. If he does not have all the information he needs for this notification, he must ask the consumer or the previous payment service provider to provide him with the missing information,
  • the payees named in the authorization who debit amounts of money from the previous payment account in the direct debit procedure, the details of the new payment account details and the date specified in the authorization from which direct debits are to be debited from this payment account, and the payees a copy of the related authorization to transfer. If he does not have all the information he needs for this notification, he must ask you or the previous payment service provider to provide him with the missing information.

The new payment service provider must also inform the consumer about his rights, as far as relevant,

• Restrict direct debits to a certain sum or periodicity, or both;

• Advise him, if the direct debit mandate does not allow for the right to be reimbursed in compliance with the payment process, to review each direct debit on the basis of the specifics of the mandate and to check if the volume and frequency of the direct debit submitted conform to the agreements of the mandate before debiting the payment account;

• Ban any direct debits linked to your payment account or all direct debits initiated by one or more named payers, or allow only direct debits initiated by one or more named payers.

What options do I have if one of the payment service providers breaches its obligations?

The payment service providers involved are liable to you for damage resulting from a breach of their duty as joint and several debtors in accordance with the general provisions.

Claims for damages can include, for example, interest on arrears in the late execution of standing orders or the costs of a direct debit return. You can assert such claims for damages before the civil courts.

Can I incur costs as part of the statutory account switch assistance?

A payment service provider only has a claim for payment against you for the fulfillment of its obligations if this has been agreed between you and the payment service provider. This fee must be reasonable and based on the actual costs of the payment service provider. In case of doubt, which remuneration is to be regarded as appropriate can only be checked in court.

A fee may not be charged for access to your personal data in connection with existing standing orders and direct debits that are available with the payment service provider in question, for sending information on direct debit clients and lists of existing standing orders, and for closing the payment account held by the transferring payment service provider of the consumer.

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