Consultation on bank accounts

Transcription

1 Ministerstvo financí České republiky Ministry of Finance of the Czech Republic Consultation on bank accounts Prague, 12 th June 2012 Dear colleagues, Please find bellow both our general and specific comments. GENERAL COMMENTS The Ministry of Finance of the Czech Republic welcomes the opportunity to participate in the European Commission public consultation. These comments and responses are only an indication of the possible approach by the Ministry of Finance of the Czech Republic and they are not meant as our final official policy position. TO THE PARTICULAR QUESTIONS 1. TRANSPARENCY AND COMPARABILITY OF BANK ACCOUNT FEES Question 1: Do you consider that the information provided by banks on bank account fees is presented to consumers in a sufficiently clear manner and easy to compare between banks? What good practices could you identify? What are the persisting shortcomings? Do you think that amendments to the transparency obligations in the Payment Services Directive (2007/64/EC) could address those shortcomings? We consider the main transparency problem to be with packaged services, where the client does not see the price of particular items included in the package. These packages are offered mainly by big traditional banks, whereas the smaller newer banks might be considered more consumer friendly due to fewer products offered and thus simpler price lists (it is easier for clients to see what they pay for). As a good practice we might point out comparison of old and new price lists. On the other hand, the price lists of bigger banks remain unclear and confusing for some clients. However, we do not think that these shortcomings should be addressed by amending the Payment Service Directive, since the Payment Service Directive covers all payment service 1

2 providers (i.e. also mobile phone operators, electronic money issuers etc.). For preferred solutions please see the answers below. Question 2: Do you think that standardising bank account fee terminology could help to provide more transparent and comparable information on fees? If terminology were to be standardised, should that standardisation cover all fees or only some of them? If only some of them, on the basis of which criteria should they be chosen? Should terminology be standardised at national or EU level? Yes, we think that standardizing the most commonly used bank fees terminology would be helpful for the consumers. However, in our opinion terminology should be standardized only at national level, since bank products differ greatly among Member States. Question 3: Do you think that glossaries of terms and standardised lists of bank fees would facilitate comparability? If so, what format and content should this information have? What body/forum would you consider appropriate to develop such a glossary/standardised list of fees? Yes, glossaries of most commonly used terms and standardized lists of bank fees would facilitate comparability. These should be first developed by self regulating bodies and if the self regulatory initiative fails, then by the regulator. Question 4: In order to further increase bank account fee transparency and comparability, which of the following tools should be considered: i) comparison websites managed by public authorities No, we do not see this as a role of public authorities. ii) standardised cost simulations to be provided by banks We are rather sceptical about the usefulness of standardised cost simulations, since there is no model consumer. On the other hand, interactive calculators, where the consumer can select specific products or services according to her/his individual requirements so that he/she would see their cost, would be highly helpful. iii) standardised representative examples to be provided by banks As in the answer above, we would like to point out that the real clients may differ significantly from the model one, therefore the usefulness of representative example is questionable. iv) surveys by consumer organisations/financial ombudsman 2

3 We think it should be the role of consumer organisations to serve as watchdogs between consumers and banks. On the other hand, we do not consider this to be the role of financial ombudsman whose focus should be primarily on dispute resolution. v) any other tools you consider relevant? In the Czech Republic there already exist comparison servers which are operated either by private entities or non government organisations. Should any of them be made compulsory? What would be the likely costs? Not in the first phase. Only if introducing self regulatory regime does not lead to satisfactory results, regulation (imposing legal obligation) might be considered. Question 5: What level of detail should the information on actual fees paid have and how frequently should it be provided to the account holder? Would having comparable information on the fees actually paid encourage consumer mobility, including on a crossborder basis? We perceive as adequate to fulfil requirements introduced by Art. 47 par. 1 c) and Art. 48 par. 1 c) of the Payment Services Directive. Crucial for a client is to get information about every fee on a monthly basis. Furthermore, contrary to other countries where consumers evaluate their budget issues on a yearly basis, in the Czech Republic it is considered mainly on a monthly basis, so the monthly account statement is sufficient. Question 6: What other measures/instruments should be considered in order to improve the transparency and comparability of bank fees? Please describe and indicate at which level (national or EU) you consider they should be taken. We do not think there is a need for any additional measure at the moment. 2. SWITCHING BETWEEN PAYMENTS ACCOUNT PROVIDERS Question 7: Do banks in the Member State where you have a bank account offer a switching service? If yes, is it in line with the Common Principles on bank account switching described above? Is information on the conditions of switching presented in a consumer friendly manner? Yes, 19 banks in the Czech Republic (i.e. all main retail banks) have acceded to the Mobility Standard of the Czech Banking Association (Code of Mobility). However, publicly available information on the internet indicates that problems with switching may persist in individual cases especially due to lack of information or clients misunderstanding information given by banks employees. 3

4 Question 8: If a switching service in line with the Common Principles is offered by banks in the Member State where you have a bank account, does it remove all obstacles to bank account switching? If not, what obstacles remain? Provide examples of good practices and persisting obstacles encountered. It seems that main obstacles have been removed, even though so far not all banks in the Czech Republic have acceded to the Code of Mobility. According to banks there are no obstacles, however, publicly available data on the internet suggests that in individual cases unfair procedures in order to make the clients stay might occur (e.g. unfounded suggestions that client might lose his transaction history and thus lose access to bank s products at favourable rates). On the other hand, newly established banks actively use the Code of Mobility and inform about the procedure in order to acquire new clients. The competent authority (The Czech National Bank) has registered only isolated and sporadic complaints regarding account switching services. It might be mentioned as well that consumers often do not want to switch to a new bank completely, but they rather open new account so that they have two accounts and combine the services offered (e.g. cheaper withdrawals at one bank with cheaper payments through internet banking at the other). Question 9: Should the Common Principles remain voluntary? What do you consider are the advantages or disadvantages of making them compulsory at EU level? What would be the likely costs? We think that the Common Principles should remain voluntary. Moreover, in case of direct debit transactions, informing direct debit initiators (payee) about switching to another account should especially for a reason of possible high costs remain voluntary. Question 10: Should switching principles/measures also cover cross border switching of bank accounts? Because of language barriers and subsequent cost of communication and translation, the cross border switching would probably be too costly. Also, there seems to be little demand for this service on the consumer side. Question 11: According to you, how important is the risk of having receipts, bills and payments misdirected when switching bank accounts? What measures could be considered to make the switching process safer? Human factor failure can never be ruled out entirely. Nonetheless, we are not aware of any cases of misdirection when switching payment accounts. Naturally, the responsibilities of each particular provider involved (i.e. the original one as well as the new one) should be defined clearly. 4

5 Question 12: What obstacles, if any, are still faced by account providers that are smaller or established in another Member State to expand their client base or to enter new markets? Are these connected to problems with switching facilities? Generally speaking there are no obstacles. Moreover, newly established banks use switching mechanism actively to acquire new clients. However possible hindrances could be caused by the original bank (in details see the answers above). Question 13: What other measures should be considered to improve bank account switching? Please describe. General awareness about switching among consumers should be promoted especially about the simplicity and speed of the whole process as some consumers seem to remain doubtful about smooth execution of the procedure by the banks. 3. ACCESS TO A BASIC PAYMENT ACCOUNT Question 14: Do you dispose of information on consumers encountering difficulties in access to a basic bank account? What types of obstacles are signalled by the consumers preventing them from having access to a basic bank account? In the Czech Republic access to the payment account is not a problematic issue. Thanks to highly competitive market, everybody with valid ID card can for free or for a reasonable monthly fee open a payment account with basic features (consistent with the Commission s recommendation on access to a basic payment account), which are offered by number of banks in the Czech Republic. Problems with opening an account are almost exclusively caused by invalid ID card or breach of anti money laundering and anti terrorism financing restrictions (AML restrictions). Question 15: Are you aware of any measures taken by banks or other institutions in the Member State where you have your residence to facilitate access to a basic payment account? Have these initiatives been successfully enforced? In the Czech Republic there are no requirements regarding for example minimal income or credit history in order to open a bank account. Furthermore, number of consumers, especially the elderly, prefers to use postal services for basic payment transactions. Also there are families with only one joint payment account. 5

6 Question 16: Do these measures also facilitate access to a basic payment account for non residents? Non residents have to submit just one valid personal document (ID card or passport) in order to open a payment account as well as residents, so there is no barrier based on nationality. Question 17: If consumers still have difficulties in opening a bank account, what are the reasons for that? We are not aware of any difficulties in opening a bank account other than invalid ID card or invalid passport. Also financial ombudsman, Czech National Bank and banks themselves did not indicate any evidence of other possible hindrances for consumers. Question 18: If more needs to be done what additional measures should be envisaged? Should the problem be tackled at national or EU level? As regards the Czech Republic, no measure is needed. Nevertheless, if the action was to be taken at the EU level, it should be in the form of a recommendation. If there are persisting problems in particular countries they should be solved at their national level. 6