Europe to legislate against bank charges

Europe to legislate against bank charges

European banks continue to charge excessive fees for low-value cross-border payments within the EC and a large number of these transfers are subject to unauthorised double charging. These are the main findings of a new study undertaken for the European Commission.

The study examined 1480 credit transfers of €100 throughout the European Union. It shows shows that customers are given insufficient or no prior information by their banks about the costs of transfers, that there is still a high percentage of unauthorised "double charging" and that the average cost of cross-border credit transfers has remained virtually at the same level as 1993 when a comparable study was undertaken, with an average charge of €24.09 for a transfer of €100.

Internal markets commissioner Frits Bolkestein, comments: "The survey clearly demonstrates that in far too many cases customers are not receiving the information on charges to which they are entitled under the Directive and that there is still too much unauthorised double charging. Moreover, the fact that the level of charges has hardly changed since the Commission’s directly comparable survey in 1993, despite repeated claims from the banking sector that they would act decisively to reduce these costs, clearly demonstrates that the Commission has no alternative to proposing legislation to require banks to levy the same charges for cross-border and domestic payments."

The Commission recently proposed new rules on cross-border payments in euro, which will oblige banks in all Member States to levy the same charges for cross-border and domestic payments. The proposed Regulation aims at a reduction of charges for cross-border payments of up to €50.000 in euro, so that by 1 January 2002 (concerning electronic payment transactions), respectively by 1 January 2003 (concerning cross-border credit transfers and cross-border cheques) charges would be aligned to those for corresponding payments at national level.

The Council and the Parliament of the European Communities will discuss this proposal during autumn of 2001.

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