24 February 2012

ABBL: Consumers - switching bank accounts may not be as easy as hoped

The Luxembourg Bankers' Association reports that switching your bank account may not be as easy as you hope. Results of a consumer market study published show that more than two thirds of mystery shoppers were not able to switch their bank account successfully.

The Commission's 2007 inquiry into the retail banking sector identified significant barriers to customer mobility. These findings were followed by extensive consultation which led the European Commission to urge the Banking Industry Committee (EBIC) to act. EBIC established a self-regulatory initiative based on common principles, which was expected to bring clarity for consumers, but today's results show that self regulation in this case is clearly not delivering the desired results.

EU Health and Consumer Commissioner, John Dalli, said: "I would have liked to see this self regulation initiative working better and banks doing more to make switching easier for European consumers. Consumers need to be able to look for opportunities in the market without undue difficulty or fear of disruption of their payments or receipts. People should be able to change their bank account as easily as they do any other service."

81 per cent of mystery shoppers had problems switching and they identified the following weaknesses: 71 per cent of banks would not assist in the transfer (therefore they did not follow the procedures outlined in the Common Principles); 7 per cent of banks approached did not open an account and/or switch a standing order within 14 working days; 3 per cent of mystery shoppers found that the new bank refused to open a standard account, for example, shoppers were told they would have to receive their pay on the new account if they wanted to open it.

The European Commission is now assessing possible courses of action to address adequately the shortcomings identified in this study with switching.

Full article

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