Banking charges just gobbledegook
EU report lambasts French banks over hidden fees, bamboozling small print and dodgy advice that forces up prices
HIDDEN charges, gobbledegook and shoddy advice are being used by the majority of banks across the EU to violate customers’ rights and increase costs.
A report from the European Commission said French banks were among the worst for hidden fees and incomprehensible charging structures – leaving even EU experts confused.
Experts found France was third most expensive country in Europe after they studied accounts from 224 banks and found users’ current account charges ranging from €253 in Italy to €27 in Bulgaria. French banks were charging €154. UK costs were put at €103.
French banks were denounced for the opacity of their accounts and the unreliability of information from advisors but the French Banking Federation said it was “astonished at the results of the inquiry and doubted its accuracy”.
The French Association of Bank Customers (AFUB) said it doubted if the banks would listen to the reprimand from Brussels.
Europe’s Consumer Commissioner Meglena Kuneva said “retail bankers are letting customers down”.
Two-thirds of the banks were failing consumers by not listing fees and charges – or presenting them so they were impossible to understand. Even the EU experts could not understand the real costs of accounts in 150 banks and had to ask for extra information.
Ms Kuneva called for a culture change and said: “There is widespread evidence that basic consumer principles are being violated with problems from complex pricing to hidden charges and information that is unclear and incomplete.”
Pan-European competition was being disrupted so only 9% of customers were switching providers, compared to 24% for auto insurance where internet comparison sites makes switching easier.
She called for an EU-wide price comparison website for current accounts and for banks to publish unified fees structures.
The banks have been warned that the EU Unfair Commercial Practices Directive – which bans practices which confuse consumers and disrupt choice – comes into force in a voluntary code on November 1.
The Commission is now monitoring implementation and Commissioner Charlie McCreevy, in charge of the EU single market, added it was ready to “set the ground rules”.
French economy minister Christine Lagarde said the government was keeping a careful eye on bank charges – and said it had already implemented measures to put a ceiling on fees and to improve customer mobility.
