3/3/2012
Article from The Portugal News Online
Switching bank accounts may not be as easy as can be hoped, the European Commission has said following an in-depth investigation.
Results of a consumer market study published show that more than two thirds of mystery shoppers were not able to switch their bank account successfully.
The Commission’s 2007 inquiry into the retail banking sector identified significant barriers to customer mobility. These findings were followed by extensive consultation which led the European Commission to urge the Banking Industry Committee (EBIC) to act. EBIC established a self regulatory initiative based on common principles, which was expected to bring clarity for consumers, but today’s results show that self regulation in this case is clearly not delivering the desired results.
EU Health and Consumer Commissioner John Dalli said, “I would have liked to see this self regulation initiative working better and banks doing more to make switching easier for European consumers. Consumers need to be able to look for opportunities in the market without undue difficulty or fear of disruption of their payments or receipts. People should be able to change their bank account as easily as they do any other service.”
EU Internal Market Commissioner Michel Barnier said “The results of the study published today explain why consumers change their banks so rarely. If consumers are not able to easily switch bank accounts, they cannot take advantage of better and cheaper banking services on offer elsewhere. The single market is thus deprived of the competitive drive that leads to innovation, cost savings and better quality banking services. This, in the long-run, can prove to be an obstacle to growth”.
In December 2010 the European Commission launched a mystery shopping exercise to monitor the effectiveness of the self regulation initiative, in all 27 EU Member States. Mystery shoppers conducted more than 1000 assessments involving more than 900 enquiries to test the provision of information and more than 400 tests for ease of switching.
The study found that only 19 percent of mystery shoppers were able to successfully open a bank account with a new bank and switch a standing order based on the process described in the Common Principles established through self-regulation.
A total of 81 percent of mystery shoppers had problems switching and they identified the following weaknesses; 71 percent of banks would not assist in the transfer (therefore they did not follow the procedures outlined in the Common Principles), while 7 percent of banks approached did not open an account and/or switch a standing order within fourteen working days and 3 percent of mystery shoppers found that the new bank refused to open a standard account. For example, shoppers were told they would have to receive their pay on the new account if they wanted to open it.
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Article from The Portugal News Online
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