A new code which came into effect on Monday means that consumers not happy with their bank can move to a different provider without too much trouble, writes Laura Slattery.

Every year, the frenzied customer recruitment drive begins. Banks barge their way into schools, colleges and cinema advertisements, seeking to convince teenagers that their no-nonsense brand is the financially savvy option and hinting that they will cough up a generous personal loan whenever they need one, whatever the reason.

According to Bank of Ireland, around 40 per cent of its current accounts are opened by people under the age of 16.

Combine this statistic with the fact that only a tiny percentage of us will ever switch current accounts and it seems that many of us make decisions that affect our long-term finances at an age when we're still receiving pocket money.

But all the travel vouchers, loan discounts and offers of free call credit eventually dry up. Sometime, usually shortly after graduation, our bank will start taking our custom for granted, stop returning our calls and start making us pay.

However, thanks to a new industry code of practice introduced on Monday, banks such as Permanent TSB and Ulster Bank are showing disaffected but inertia-bound customers of rival banks how they can get better value from their current accounts.

Permanent TSB has abolished regular transaction and service charges for all customers using its new current account, making it the first current account in the Republic to offer free banking to all customers regardless of whether their accounts are in credit or overdrawn.

Meanwhile, Ulster Bank has announced that it will waive the charges for setting up standing orders and direct debits on new accounts for the first three months that the account is open.

Both banks are taking advantage of a new Irish Bankers' Federation (IBF) code of practice on switching that is designed to make it easier and quicker for customers to change current accounts.

Up to now, smaller banks such as Permanent TSB, Ulster Bank and National Irish Bank (NIB) have had little success in luring customers away from the two big banks, AIB and Bank of Ireland, which between them have around 75 per cent of the current account market.

This is because once we have memorised our PINs, given our employer our bank account details, arranged standing orders and signed countless direct debit mandates, we become "locked in" to our current account provider, unwilling to submit to the time-consuming hassle of switching.

But since January 31st, the responsibility for switching all direct debits and standing orders from the old account to the new account lies with the two banks and not the consumer.

Once consumers open an account at their new banking home, they fill out and sign just one account transfer form, which the new bank sends to the old bank.

This form authorises the old bank to give the new bank a list of all standing orders and direct debits on the account.

The old bank is also obliged to inform each direct debit originator - i.e. the utility firm or insurance company - of the customer's new account number and sort code. The new bank then sets up the altered direct debit mandates.

This process must be completed within seven days. In addition, the new bank must have the account up and running within 10 working days of approving the application.

Each bank must also produce and make available in branches a "switcher pack" showing a step-by-step guide on how to move.

But the IBF code of practice does not go far enough, according to the Competition Authority.

In its interim report on the banking industry, the authority notes that, in the UK, banks have to transfer direct debits and standing orders within a "substantially shorter" timeframe of just three days. It calls on the IBF to match this timeframe "as soon as practicable".

The authority also suggests that the entire direct debit system be further streamlined in order to speed things up for consumers, therefore reducing the chances of hiccups such as missed or double payments.

Its report proposes the development of a standardised portable direct debit contract, so that instead of cancelling and setting up new mandates, these mandates could be switched directly between banks without having to inform the originator of the direct debit.

The Irish Payment Services Organisation (IPSO) should develop these standardised direct debit mandates by September, according to the authority's interim report.

Finally, the Competition Authority recommends that the Irish Financial Services Regulatory Authority (IFSRA), which is to monitor how the new switching code is working, should publish its findings by June.

IFSRA has not yet decided when it will issue a report on the code's effectiveness in helping consumers switch accounts, a spokeswoman for the financial regulator says.

As the code of practice is a voluntary industry agreement, IFSRA has no powers to fine or sanction banks that deliberately drag out the switching process in order to prevent an exodus of disgruntled customers.

The regulator will only consider implementing a code on a statutory basis if the voluntary code proves to be inefficient, the spokeswoman says.

IFSRA, the IBF and IPSO all plan to make submissions to the Competition Authority by the consultation deadline of February 14th.

"We will be as positive as possible in terms of responding to the recommendations," says Mr Felix O'Regan, a spokesman for the IBF.

Portable direct debit mandates could contribute to speeding up the switching process, he believes.

Government stamp duties on ATM and laser cards also hinder switching, according to the Competition Authority.

At the moment, a consumer who switches current accounts is charged the stamp duties twice. As this tax is €10 on both ATM and laser cards, a consumer holding both cards will be forced to add €20 to the cost of switching.

For customers moving to Permanent TSB, Ulster Bank and National Irish Bank's Freebank account, the stamp duty is the only cost to moving.

The Minister for Finance, Mr Cowen, indicated in the Budget that the stamp duty regime will be changed so that switching consumers won't face a double charge.

But although the new system will apply to credit cards from April, double charges on ATM and laser cards are likely to continue for most of 2005, according to Mr O'Regan.

It is thought that some banks may agree to pay the stamp duty on behalf of customers as part of their efforts to add more than just students to their customer base.

Permanent TSB claims that customers who move to its new free account can save an average of more than €100 a year in bank fees.

However, these savings - relatively small compared with what can be pocketed by remortgaging to a cheaper lender - are only one reason to make the move.

A bank might close down its local branch, prompting a switch to the next most convenient rival.

Like AIB and NIB, the bank might become embroiled in an overcharging scandal that leaves a legacy of distrust.

Or the bank could simply make so many administrative errors on the account, that customers start taking it personally.