Theano Thiopoulou
Bank charges, especially whenever there is a change in pricing policy, are something that thousands of customers are interested in, who need to know what they are paying for and for what service. Last week, the debate resumed at the political, institutional and trade union level on bank charges that will take effect in early 2022, and in turn, through announcements, the Central Bank and the Ministry of Finance are clarifying their position.
“F” gathered various information, both from the website of the Commission and of the European Banking Authority (European Banking Authority) for the basic data that the customers should know about the charges to which they are submitted. In Cyprus, the 2020 decree “on setting reasonable fees for payment accounts with basic characteristics” also applies, which also covers the vulnerable groups of the population.
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The central point of reference is that bank customers should state to their bank which is the basic services account (savings, current) they will use and with which they will be connected by card or cards. A consumer may have an account that includes basic services and a second bank. The customer is usually asked by his bank if he has another basic services account with another credit institution.
Fee information
Before opening an account, the bank must provide the bank with a document listing the most important services provided in relation to the account, as well as any relevant fees that may be charged to it. This is the so-called “fee information sheet”. This card can be used to compare the cost of accounts at different banks. The bank must also provide, at least once a year, a statement explaining the fees charged to the bank account and any variations. This “fee statement” must also contain information about the interest rates that apply to the customer's account.
Understandable fees
One of the major issues that concerns bank customers is not only whether there are increases in charges at certain times, but whether the charges are understandable. There is a European directive that addresses issues such as the comparability of fees associated with payment accounts, the change of payment accounts and access to payment accounts with key features.
“It is crucial for consumers to be able to understand the charges so that they can compare offers from different payment service providers and decide with full awareness which payment accounts best suit their needs. There can be no comparison of fees when payment service providers use different terminology for the same services and provide information in a different format. “Standardized terminology, combined with targeted fee information in a coherent format, covering the most representative billing-related services, can help consumers understand and compare fees.”
Clearly everything for consumers
The directive specifically states that, in order to make it easier for consumers to compare payment account charges across the internal market, payment service providers should provide consumers with an information sheet and standardized terms and definitions should be used. at EU level. This also helps to ensure a level playing field between competing payment service providers in the market.
The fee information sheet should not contain any other fees. When a payment service provider does not offer a service that appears in the list of the most representative services associated with a payment account, it should indicate this, for example, by labeling the service as 'not offered' or 'not applicable'. .
Member States should also, under the European Directive, be required to require the provision of key indicators, such as the overall cost index, which summarizes the total annual cost of the consumer payment account, to be provided with the fee information sheet. . In order to help consumers understand the fees they have to pay on their payment account, they should be provided with a glossary with clear, non-technical and ambiguous explanations, at least as regards the fees and services included in the prospectus. fees. The glossary is expected to be a useful tool to encourage a better understanding of the importance of fees and to enable consumers to choose from a wider range of payment account offers.
There should also be an obligation for payment service providers to require consumers to inform consumers, free of charge and at least annually, of all charges charged to their payment account, including, where applicable, the overdraft rate and the credit rate.
Basic payment services
Consumer access to a range of basic payment services should be ensured. Services related to key payment accounts should include the ability to deposit cash and withdraw cash. Consumers should be able to make necessary payment transactions, such as collecting income or benefits, paying bills or taxes, and purchasing goods and services, including direct debit, credit transfer, and payment card use. These services should enable the online purchase of goods and services and give consumers the opportunity to place payment orders through the credit institution's online platform, if any.
Fewer obstacles
However, using a basic payment account should not be done only online, as this would be a barrier for consumers who do not have internet access. Member States should ensure that, in the case of services related to the opening, keeping and closing of the payment account, as well as the deposit of funds and cash withdrawals and the execution of payment transactions by payment cards, other than credit There are no limits to the number of transactions that will be available to the consumer under the special pricing rules laid down in this Directive.
With regard to the execution of credit transfers and direct debits, as well as credit card transactions linked to the pay-as-you-go account, Member States should be able to specify a minimum number of transactions made available to the consumer on the basis of the special pricing rules laid down in the Directive, provided that the services covered by these operations are intended for the personal use of the consumer. In determining what should be considered personal use, Member States should take into account current consumer behavior and common commercial practice. The fees charged for transactions beyond the minimum number of transactions provided should never be higher than those charged under the credit institution's standard pricing policy.
National peculiarities
National specificities should be taken into account in the process of determining the services to be provided with a key payment account and the minimum number of transactions to be included. In particular, some services may be considered essential to ensure the full use of a payment account in a particular Member State, due to their widespread use at national level.
In some Member States, for example, consumers still use checks widely, while this means of payment is rarely used in other Member States. In addition, each Member State should ensure that the fees charged by credit institutions for providing these additional services, in relation to a key payment account, are reasonable.
Special arrangements for vulnerable bank customers
In order to encourage non-bank vulnerable consumers to participate in the retail banking market, Member States should be able to provide that key payment accounts are offered to these consumers on particularly favorable terms, for example free of charge. Member States should be free to define the mechanism for identifying those consumers who can benefit from key payment accounts on more favorable terms, provided that the mechanism ensures that vulnerable consumers can access a payment account. with basic features. In any case, this approach should not prejudice the right of all consumers, including non-vulnerable ones, to have access to key payment accounts with at least a reasonable fee.
In addition, any additional charges imposed on the consumer in the event of non-compliance with the terms of the contract must be reasonable. Member States should determine what the fair fee is depending on the circumstances prevailing at national level.
Member States and credit institutions should provide consumers with clear and comprehensible information on the right to open and use a key payment account. Member States should ensure that communication measures are well-targeted and, in particular, target consumers who do not use banking services, as well as vulnerable and mobile consumers. Credit institutions should actively provide consumers with accessible information and appropriate assistance on the specific features of the pay-as-you-go account, the relevant fees and their terms of use, and the actions that consumers should take. in order to exercise the right to open a payment account with basic characteristics. In particular, consumers should be informed that they do not have to purchase additional services in order to open a payment account with key features.
Education and assistance to vulnerable consumers
Member States should promote measures to support the education of the most vulnerable consumers by providing them with advice and assistance in managing their finances responsibly. It is also necessary to provide information on the guidance that consumers' organizations and national authorities can provide to consumers. In addition, Member States should encourage initiatives taken by credit institutions to facilitate the combination of key payment accounts and independent financial education services.
