EU proposes bank account switching Directive

EU proposes bank account switching Directive

The European Commission is proposing new rules to make it easier for consumers to compare bank account fees and switch to another provider.

Under the proposals, banks will be expected to put in place procedures to handle the transfer of accounts within a fifteen-day timeframe and inform utility suppliers of the change. Banks must also provide a full list of fees charged for individual accounts and each member state will be obliged to establish at least one independent comparison Website, collecting information on bank charges.

The proposed Directive, which will come into force within three years, also calls on member states to ensure that at least one payment service provider offers a payment account with basic features in their territory. Operators of these accounts will not be able to use the financial situation of the applicant as a reason to bar access. At a minum these account must include withdrawals, bank transfers and a debit card. Overdrafts or credit facilities will not be permitted on basic accounts.

According to recent studies, around 58 million consumers over the age of 15 in the EU do not have a payment account.

Commissioner for health and consumer policy Tonio Borg says: "This proposal allows consumers across the EU to access bank account services, to compare them and, if they are not satisfied, to switch to another provider. Our aim is that consumers are better informed about fees both before and after they open an account, and that they can change their provider rapidly and easily if they so wish. This proposal will also favour competition in the retail financial services sector and reward businesses that offer consumers a better choice and price."

Comments: (1)

Gary Wright
Gary Wright 08 May, 2013, 12:57Be the first to give this comment the thumbs up 0 likes

Lets hope this dovetails with the planned UK changes that provide similar customer benefits as the EU Directive but will come in years ahead. Some uniformity on these directives should not be much to ask!