"Around 10% of the banks had little or no price information available on their website and one third of them had incomplete price information in their tariff list. This is unacceptable," EU Consumer Affairs Commissioner Meglena Kuneva told bankers attending a conference in Brussels organised by the European Savings Bank Group.
The EU executive threatened to open infringement procedures against member states which allow banks to provide users with incomplete or incomprehensible information. "But this is not on the agenda at the moment," an EU official said. The procedures could be carried out under the banner of the Unfair Commercial Practices Directive adopted in 2005, which is still in the process of being transposed into national law.
The Commission is also pushing for the adoption of standard information with which banks should provide consumers in order to facilitate their understanding of contracts and pre-contractual agreements.
Wide price gap across the EU
Kuneva also outlined her concerns regarding wide divergences between current account costs across member states.
According to a report published yesterday, prices for consumers can vary significantly, with average annual fees reaching over €100 in Italy, France and Spain, but remaining under €60 in countries such as Bulgaria, Portugal, the Netherlands and Belgium. In the latter group, no fee is required for many services, including opening or closing bank accounts, making international transactions or withdrawing cash.
For users requiring more specific and intensive services, costs may even soar beyond €800 a year in Italy, while they remain very low in other countries. The Italian Banking Association (ABI) rebuffed the claims, insisting that in Italy bank fees for current accounts may reach up to €100 but not higher. "What has been said today in Brussels refers to wrong figures obtained through wrong calculation methodologies," said ABI President Corrado Faissola in a statement.
"Unsurprisingly, our study finds that the retail banking market is fragmented along national lines, implying that, at least for bank accounts, the internal market does not yet exist," regretted Commissioner Kuneva.
Nevertheless, the EU executive ruled out the option of imposing price caps on bank fees, a system already applied in the mobile telecoms sector for cross-border charges, also known as roaming tariffs. "We have no plans regarding caps," an official from the Commission told journalists in Brussels.
"Prices change according to national markets. In some countries, higher labour costs trigger higher fees. In others, taxes can place an extra burden on consumers. A price comparison should take these differences into account," a banking sector representative told EurActiv, preferring to remain anonymous.
In praise of account portability
Another shortfall highlighted by the Commission survey is the low number of consumers switching banks. Customers say this is a consequence of opaque information provided by banks themselves.
"Many consumers tell us they have no idea about the fees they are charged for such simple services as direct debits or cash. We cannot be surprised, therefore, that only 9% of consumers have changed their bank accounts in the last two years if they find it so hard to get information about the charges of the bank next door," Monique Goyens, director-general of EU consumer organisation BEUC said in a statement.
"Financial products are like any other product on the market. We should know what we are getting before we buy and we should be able to easily change suppliers if our needs are not being met", said UK Conservative MEP Malcolm Harbour, chairman of the European Parliament's consumer protection committee.
The Commission points out that while the switching rate for bank accounts is 9%, in other sectors it is much higher. For example, at least one out of four subscribers to a car insurance scheme changes provider within a relatively short period of time.
