Account switching too hard, study finds
(6 June 2007 – Europe) The European Commission (EC) is exploring ways of making it easier for customers to switch bank accounts.
The EC has published a report which highlights four main obstacles when switching accounts: lack of consistent information and non transparency of prices, bundling practices by banks; the administration burden; and high exit fees.
The report also found that customers were unable to shift accounts across different European countries due to legal and regulatory barriers and uncertainties.
British Bankers' Association chief executive Angela Knight said the EU's moves were supported by British banks.
'Every country has its own way of doing things which would make it a nightmare to dovetail systems across all member states. It also fails to take into account the way people want to bank, for example having one account for the bills and another for saving.'
The report has put forward 37 recommendations to overcome the obstacles identified. This includes potentially introducing a European account number portability system, allowing customers to keep their account numbers when they change banks.
The report also found that customers were unable to shift accounts across different European countries due to legal and regulatory barriers and uncertainties.
British Bankers' Association chief executive Angela Knight said the EU's moves were supported by British banks.
'Every country has its own way of doing things which would make it a nightmare to dovetail systems across all member states. It also fails to take into account the way people want to bank, for example having one account for the bills and another for saving.'
The report has put forward 37 recommendations to overcome the obstacles identified. This includes potentially introducing a European account number portability system, allowing customers to keep their account numbers when they change banks.
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