Banks rapped for confusing fees

BANKS have been criticised by consumer groups over a complicated web of expensive fees and charges.

UFC-Que Choisir said customers were paying about e15 billion a year in costs and fees so obscure “even bank staff have difficulty explaining what some actually mean”.

A customer wanting to compare account costs would have to read 290 pages of fees from the 12 major banks and 3,636 different fees.

Since January 2009 banks have been forced to send customers tariff details to allow them to make decisions on value – but UFC-Que Choisir said the fees were too complicated to do this.

The average brochure was 24 pages long with 300 different fees, it said, adding: “The banks have made things more obscure and made their customers pay for it.”

It said that “service packs” – where customers pay a monthly subscription to cover most day-to-day transactions – were on average 25% dearer than paying individually for operations such as cheque account, cash card, and internet and telephone access.

Banks made 30% of their profits from these services, as customers paid for services they would never use.

The president of AFUB (Association Française des Usagers des Banques) Serge Maître says the majority of banks had not played the game. He called for a shopping basket of the most popular services to be created with banks listing prices.

Finance Minister Christine Lagarde is waiting for the results of an inquiry into bank charges and UFC-Que Choisir has put forward seven recommendations.

They include introducing a standard name for banking operations that every bank would then use in its price lists, making it easier for customers to compare.

A new independent watchdog should also be set up.

The group said a limit should be put on penalty fees as they had soared to 27%, which was over the taux d’usure – the maximum interest rate banks can charge.

Last year French banks were labelled by the European Commission as among the worst for hidden fees and incomprehensible charges. It said customer fees averaged €154 as against €58 in Belgium and €27 in Bulgaria.

Consumer Commissioner Meglena Kuneva said pan-European competition was being disrupted. Only 9% of customers were switching banks, compared to 24% for auto insurance where internet comparison sites made switching easier.

Ariane Obolensky of the Fédération Bancaire Française said banks had made big efforts to give easier information through their internet sites and in banks. They were also putting together a glossary of common terms.

She added that bank tariffs had fallen by 5% last year.