For 66% of banks surveyed, bank fees were reported to be so unclear that experts compiling the report needed additional explanatory contacts with the bank to find the real costs of an account.
There are widespread problems with the way banks inform and advise their customers according to a European Commission report on retail financial service published today.
Specific problems include information which in many cases is difficult to understand, opaque bank fees, problems with advice and low levels of switching. The report describes the price structures of current accounts as "very opaque making it almost impossible for consumers to know how much they are paying and to compare different offers." For 66% of banks surveyed, bank fees were so unclear that experts compiling the report needed additional explanatory contacts with the bank to find the real costs of an account. Austria, France, Italy and Spain score poorly on transparency and are among the most expensive countries for banking accounts. The EU market is fragmented depriving consumers of the advantage of an EU Internal Market. Only 9% of EU consumers switched current accounts for the two years 2007-2008.
EU Consumer Commissioner Meglena Kuneva said: "Retail bankers are letting consumers down. There is widespread evidence that basic consumer principles are being violated with problems from complex pricing to hidden charges and information that is unclear and incomplete. Banks need to put their house in order with a culture change in the way they treat customers. And Member State Authorities need to fulfil their obligation to enforce EU consumer laws.
Internal Market Commissioner Charlie McCreevy said: “This consumer market monitoring shows the difficulties that consumers face in their dealings with retail financial products and services. The Commission is determined to combat those problems. That means imposing transparency with understandable and comparable information and setting the ground rules for the conduct of business. As Europe's citizens continue to feel the effects of the economic crisis, this work has become even more important."
Industry (voluntary) common principles to facilitate bank account switching will apply on November 1st 2009. The Commission will monitor implementation carefully.
© European Commission
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