EC Launch Consultation on Bank Account Switching
The European Commission launched a consultation addressing possible ways to simply switching bank accounts between financial institutions both domestically as well as cross border within the European Union. The report outlines recommendations addressing the obstacles identified, including the possible introduction of an EU-wide “account number portability” system which would allow customers to change banks but keep their account number, thus making it easier to transfer services tied to accounts such as direct debits and standing orders. The consultation follows the publication of a report drafted by an ‘expert group on customer mobility’ identifying the obstacles customers face when switching bank accounts, both nationally and within the European Union. The findings showed that clients face four main obstacles when switching accounts (1) Lack of consistent information and non-transparency of prices (2) Bundling and tying practices by banks (3) Substantial administration and (4)high closing charges. In addition, legal and regulatory barriers, as well as legal uncertainties, prevent customers from opening accounts across borders. The EC is now opening a public consultation on the group’s report. The study and the results of the consultation will contribute to future policy decisions on account switching.