40,000 take Choice switching bait

Consumer advocacy group Choice's banking business partner One Big Switch yesterday advised that its "Big Bank Switch" home loan group buying scheme has attracted 40,306 registrations.

The size of the email list created by Choice's campaign demonstrates the power of the group's brand and suggests it could attract enough genuine refinancers to have a viable business - at least if One Big Switch can elicit a competitive offer.

One Big Switch also took the first step to elicit more details from its registrants about how much business they could move to a new lender.

Industry experts have asked how One Big Switch could negotiate successfully with potential lenders without any information about the current finances and financial needs of the people who have signed up for the service.

In an email yesterday to people who have provided One Big Switch with contact details, One Big Switch asked them to provide it with the size of their current loan, the value of their home and their current lender.

It said it was "in a process of negotiation with a number of Australian lenders" and was "trying to source home loan offers for registrants which offer a genuine group discount".

That "process of negotiation" may be tentative so far. The Financial Review today reports that representatives at each of the four major banks held only cursory talks with One Big Switch so far, and at a junior level, or no talks at all.

Choice's partnership with One Big Switch has been controversial among Choice members. It has also attracted criticism from industry groups such as the Mortgage and Finance Association of Australia, which represents mortgage brokers, managers and aggregators.