MEMO/09/402

Brussels, 22 September 2009

EU report on retail financial services: fact sheet

SECTION: 1. THE REPORT (background)

SECTION: 2. THE MAIN RESULTS

2.1 Pre-contractual information
2.2 Advice
2.3 Bank Fees
2.4 Switching

SECTION 1. THE REPORT

As a follow up to the Consumer Market Scoreboard 2008, the Commission has
published:
- (1) A Commission Staff Working Paper on Retail Financial Services ("Follow up
in Retail Financial Services to the Consumer Market Scoreboard,")
- (2) An in-depth bank fees study by independent consultants analysing the prices
of accounts, packages and operations for 224 banks across the EU 27, covering
on average 81% of the EU market.
The purpose of the Report is to assess three areas where consumers are faced with
a number of problems:
- (1) Pre-contractual information and the related issue of advice
- (2) Level and transparency of bank fees
- (3) Switching of bank accounts
These three issues were singled out as problematic based on the Annual Consumer
Market Scoreboard (annual market monitoring across more than 20 sectors) in 2008.
The Consumer Markets Scoreboard is a monitoring tool developed by the European
Commission, designed to watch EU markets from the consumer's perspective and to
assess if they are performing effectively for consumers. The Scoreboard uses five
main criteria to assess the health of a specific consumer market: consumer
satisfaction, the number of consumer complaints, switching rates (customer
mobility), prices and safety (see MEMO/09/44 for more details on the Scoreboard
methodology).
The latest edition of the Scoreboard published in February 2009, again, identified
retail financial services (next to energy and transport) as a sector that is
particularly problematic to consumers and therefore in need of in-depth analysis.
Some of the most acute problems in the banking sector that were detected by the
Scoreboard included the comparability of offers, stark differences in bank charges in
ways that were not always easily explained, and the difficulties in switching accounts
(see IP/09/202 for an overview of the Scoreboard results).
SECTION 2: THE MAIN RESULTS: Staff Working Paper on Financial
Services and Bank Fees Study
The sections below contain an overview of the main findings for the three specific
issues examined by the Commission Staff Working Document and Bank Fees Study.

1. On pre-contractual information
The sources:
The findings on pre-contractual information used in the report draw on a range of
sources including: a 2008 Eurobarometer survey, a report of 2008 on focus groups
organised in all 27 Member States and studies by organisations such as the UK
Better Regulation Executive and the National Consumer Council of 2007.

The results:
Pre-contractual information is one of the key instruments intending to facilitate
consumer's decision-making when buying financial services. Yet, evidence shows
that in many cases the information is difficult to understand. Information which is
incomprehensible, insufficient and presented in too many different ways making it
difficult for consumers to compare different offers and to obtain the best deal are
important barriers to cross-border shopping of financial services.
In different surveys consumers complain about deficiencies of information they
receive:
- Information is incomprehensible because of complex language using difficult
financial or legal jargon.
- Important details of the product are hidden in small print.
- Information is often too long not sufficiently concentrating on the key features
of the product.
- Too many different formats confuse consumers and hamper the comparison
of offers.
- Sometimes information is given only at the point of sale so that consumers do
not have sufficient time to take it into account.
For example:
- In focus groups on pre-contractual information requirements in financial services
organised by the Commission services in all 27 Member States, consumers
strongly criticised the complex language using difficult financial or legal
jargon. The group members evinced considerable distrust towards financial
services providers, based inter alia on opaque language which makes them
believe that banks intend to hide unfavourable conditions.
- While consumers emphasised their need for a complete set of information on
all necessary aspects of a financial product, they stressed equally that they
receive too much information. For instance in the UK, consumers found a
consumer credit agreement which required 55 minutes to read is not suitable for
information purposes.

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 Background – the current rules
The regulation of pre-contractual information is done at both EU and national level - it
depends on different products. For example mortgage credit is regulated at national
level (with an EU self regulatory code of conduct). When a product is regulated at
EU level – e.g. consumer credit or payment services, then pre-contractual
information is also regulated at EU level. Otherwise requirement are set at national
level.
At EU level, in recent years the Commission has done extensive work to improve
standards of pre-contractual information – focusing on improving the comparability
and clarity by providing standardised, comparable information forms for consumers.
The feedback from consumers is very positive on this kind of comparable
information. Where product features allow this, a well-drafted set of standardised
information disclosures facilitates clearly the comparison of offers. Examples of
where this kind of regulation, with standard information for consumers, has been
introduced at EU level is for products such as: consumer credit (in 2008) and UCITS
(in 2009).
Looking ahead, for packaged retail investment products (PRIPS), the Commission
has adopted a Communication in April 2009, announcing its intention to introduce as
far as possible standard information requirements to allow for consumers to compare
products. For mortgages pre-contractual information is one of the major issues to be
discussed in the follow up to the White Paper on Mortgage Credit of 2007. The
evidence provided in the reports published today will feed into these debates.

2. On advice provided to customers

The sources:
With regard to advice, the Commission's report draws on a range of sources,
including: a study on financial services intermediaries of 2008 launched by the
German Consumer Affairs Ministry, a Commission study on credit intermediaries of
2009 and various other surveys and studies of the same time period.

The results:
The preliminary analysis of the data assessed in the Staff Working Paper indicates
that:
- The problems of reliability of advice and the inbuilt conflict of interest
faced by advisors due to remuneration systems that can bias them towards
selling particular financial products are clearly matters which deserve further
attention.
- Advice from bank employees or brokers is often a determining factor in
consumers' decisions to buy a specific product. Research shows that many
consumers rely, without much reflection, on the advice of a familiar bank
employee in their local bank branch or a broker dealing with their financial
affairs because they perceive them to be trustworthy.
- There is growing evidence that consumers often do not obtain suitable advice
on financial services.
- For example, in Germany, consumers terminate 50-80% of all long-term
investments prematurely because of inadequate advice when buying the
products. This leads to estimated damages for consumers of 20-30 billion
Euros every year. In one survey where 25 German bank advisors were
approached in a mystery shopping exercise, 24 of these provided unsuitable
advice. Recommending expensive and unsuitable mortgages is a typical
example of selling practices resulting in consumer detriment.

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- In Ireland, complaints about advice on financial services doubled in 2008
compared to 2007 and almost 65% of them were resolved in favour of the
consumer.
- The suspicion is that many of those selling financial products do not have a
sufficient understanding of these products to be able to effectively advise
consumers on their advantages and risks.
- Furthermore, bank employees or intermediaries may often face an inherent
conflict between their interests and the interests of their clients, given
remuneration structures which create so-called "commission biases". A study on
the impact of these conflicts for direct marketing agents reveals that firms
gradually become more lax in relation to the promotion and selling of unsuitable
products. The results of a survey on (inter alia) retail investment products
revealed that 72% of the investment professionals surveyed consider the fee
structures rather than the suitability of investment products for customers as the
main driver for sales. (See Staff Working Paper for details.)
Background - the current rules
For all forms of credit – consumer credit, mortgage credit and others – advice is still
a Member State responsibility. For investment there are some rules at EU level. After
the financial crisis, the issue of advice has become increasingly important and is
being looked at closely by the Commission and authorities at national level to see if
further action is necessary. This report contributes to the evidence and will feed into
those debates.

3. Bank Fees
The sources
The Commission also published a study by an independent consultant to examine
the bank fees charged for current accounts across the EU-27.
The study "Data collection for prices of current accounts provided to consumers"
analysed a sample of 224 financial institutions, which covers 81% of the retail
banking market in terms of customer deposits. The sample was representative of
the diverse banking institutions in the EU.
The data on bank fees charged for current accounts were based on the tariffs
available on the websites of banks and on the additional contacts with the banks to
complete and clarify the information. The tariffs were assembled between
February and April 2009.
The data used to build the usage profiles was developed based on a variety of
sources, in particular the European Central Bank, national central banks, market
studies, consumer association surveys and assumptions where no data was
available. Market authorities (including banking associations) were consulted on the
usage profiles and were invited to provide data or to confirm existing data.
The aim of the study was to assess:
- prices of current accounts for different usage profiles in each country, e.g. for
average and intensive users (see below for the information on usage profiles);
- the transparency of bank tariffs in all countries;
- the simplicity of bank tariffs;
- the use of payment tools, grouping countries according to national
preferences for using electronic payments or manual operations, e.g. over-
the-counter cash withdrawals.

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Some examples of current account fees and services which were examined in the
study are:
- basic annual charges (e.g. package fees and account maintenance charges),
- account charges (e.g. opening/closing, overdrafts, insufficient funds, over-the-
counter transactions, accounts movements, internet and phone banking, income
from credit interest, etc.),
- debit and credit card charges (issuance, annual fees, blocking and replacement,
charges for withdrawals, purchases and online payments, etc.),
- credit transfer charges (reception and transmission of credit transfers, standing
orders including setup, modification and closure, etc.),
- direct debit charges (fees for setting up direct debits, sending and closure),
- cheques related charges (fees for order of chequebooks, cheque drawing,
cheque lodging and cheque bouncing).
The methodology:
To investigate the bank fees, a key concept used in the study is that of a "consumer
usage profile":
- four consumer usage profiles were created for each EU country (average,
active, passive and basic), based on the intensity of usage and in relation to
domestic preferences, i.e. the average number of banking transactions carried
out by an individual customer ("a banked adult") in a specific country;
- Four equivalent profiles (average, active, passive and basic) were created
for the EU as a whole, also based on the intensity of usage but in relation to
average number of banking transactions carried out by an individual customer
("a banked adult") for the whole EU.
Two other important concepts used in the study were transparency and simplicity.
- The transparency of bank tariffs. This was checked in the study by how easy
it was to find relevant information on websites and to calculate the price of the
different elements in the price so the consumer can compare offers
- The simplicity of bank tariffs. The study measures simplicity of bank tariffs in
terms of how many components were there in the price. e.g. one basic charge
for a service, or a charge that depends on the number of transactions you
make, or the amount you have in your account etc.
Main findings on bank fees
The key findings of the study on bank fees are:
- the fee structures of current accounts are often so opaque that it is difficult
for consumers to know how much they are paying and to compare different
offers. Almost one in three of EU consumers have difficulties in comparing offers
in relation to these same current accounts and so they are not in a position to
choose the best account for their needs.
- Online price information is incomplete. In two out of three cases, additional
contact with the bank was needed to clarify the fees. Even then, banks in many
situations only offered oral information on their tariffs, but refused to send tariff
lists by e-mail or by fax. Around 10% of the banks had little or no price
information available on their websites and 33% of the banks had incomplete
price information in their tariffs.

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- For example, a 2008 study by the UK Office of Fair Trading1 found that
consumers basically do not know what they were paying in bank charges,
either before or after they were incurred. Over three-quarters of consumers did
not know the credit interest rate of their current account. Two thirds of
consumers did not know what their bank charged for an unarranged overdraft.2
Overall, the report found that the personal current account market was set up in
a way which placed consumers at a disadvantage compared with their provider.
- In some EU countries, consumers pay considerably more for current accounts
than in others. For example, the prices of accounts with normal usage range
from as high as € 253 (country average) in Italy to as low as €27 (country
average) in Bulgaria. For "intensive" users, the difference is even clearer: from a
maximum of € 831 in Italy to a minimum of € 28 in Bulgaria (see the sections
below for country-specific data).
- High prices are directly linked to opaque price information. Therefore,
consumers in countries with opaque price structures are likely to pay more for
bank accounts.
Summary table. The overall results
Table 1 – Ranking of countries in terms of price of current bank account charges.
(see bank fees study or Annex 1 for country by country breakdown of bank fees)
Rank Country Key contributing factors Simplicity Transparency
1 Italy All key charges are very high Below average Below average
2 Spain All key charges are very high Below average Below average
Very high account and debit card charges; Above average Above average
3 Latvia
low basic annual charges
High basic annual charges; very high debit Below average Below average
4 France
card charges
Very high basic annual charges; low credit Above average Below average
5 Austria
transfer charges
6 Finland All key charges are high Above average Above average
Czech Below average Above average
7 High basic annual charges
Republic
8 Slovenia High basic annual charges Above average Above average
Very high basic annual charges; high debit Above average Above average
9 Germany
card charges; very low account charges
10 Greece High credit transfer charges Below average Below average
11 Slovakia High basic annual charges Above average Above average
12 Lithuania Very low basic annual charges Above average Above average
Low basic annual and account charges; high Below average Above average
13 Cyprus
credit transfer charges
14 Romania Low basic annual charges Above average Below average
15 Hungary High debit card charges Below average Below average
High account charges; very low credit Below average Below average
16 Ireland
transfer charges
United Most charges are very low; very high Above average Below average
17
Kingdom account charges
18 Sweden Very low account charges; high debit card Above average Above average

1
Cf. footnote 40.
2
Cf. footnote 40, p. 72.

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 charges
19 Poland Charges are within EU27 averages Below average Below average
20 Luxembourg Low account charges Above average Above average
Very low basic annual charges; high account Above average Above average
21 Estonia
charges
22 Denmark Low debit card charges Below average Below average
Very low basic annual charges and credit Above average Above average
23 Malta
transfer charges; high account charges
24 Portugal Very low account charges Above average Above average

25 Belgium Very low account and credit transfer charges Above average Above average
The Very low account charges; high basic annual Above average Above average
26
Netherlands charges
27 Bulgaria Low basic annual and account charges Above average Below average

Source: Van Dijk calculations

Summary:
The following results emerge from the ranking and analysis of the breakdown of
charges. The ranking reflects the average position of each country in the eight
profiles considered together.
- The top two positions are occupied consistently by Italy and Spain, with the
exception of one profile, implying that the two countries have the most costly
accounts in the EU. In Spain, the pricing arrangements are subject to
negotiation on a case-by-case basis between the client and his or her bank. The
actual costs could therefore be expected to be lower than the official price listsi.
Latvia’s high ranking is largely due to the high charges associated with the
usage of cheques (in the EU-27 profile), which are virtually non-existent in the
country.ii
- Austria and France present the most expensive accounts in almost all user
profiles. As the breakdown of charges provided in Annex 7 clearly shows, these
high costs are mostly due to a combination of above-average basic annual
charges and account charges.iii For France, an additional contributing factor is
the high debit card charges.
- At the other end of the cost spectrum, Bulgaria and Portugal consistently
secure low rankings, implying that the current accounts are cheap in these
countries for all customer profiles. For Bulgaria, the low usage intensity does not
appear to support this result; although the country ranks last in both the number
and value of transactions by banked adults (see section 3.5), the country’s
relative ranking changes little when the significantly higher EU average usage
rates are used. Likewise, Portugal’s ranking changes little when the EU profile is
used.iv The current accounts offered in Belgium and Netherlands are also
relatively low-cost. As depicted in the breakdown of charges given in Annex 7,
in both countries variable costs arising from fees and charges associated with
the number of transactions are also very low. In turn, the basic annual charges
comprise a significant share of total costs (especially in the Netherlands), with a
share of over two-thirds in the domestic average profile. The existence of these
high fixed costs also explains why the two countries’ relative rankings go up
when the lower usage rates associated with passive profiles are considered.
Nevertheless, despite these high costs, the costs associated with transactions
are low, which contribute to the lower ranking of the two countries.v (See Bank
Fee Study for details and Annexes)

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 As regards all other countries:
- Finland and Denmark, in turn, are cheaper when the EU profiles are
considered than when the country-specific rates are applied. The individuals in
both countries have above-average usage of credit transfers (see section 3.5),
which contribute to high costs emanating from these transactions.vi When the
usage rates for credit transfers are reduced to EU-27 average levels, the
rankings for these countries go down;
- Greece and Lithuania are costlier when the EU profiles are considered even
though the two countries are at the bottom of the list when the country-specific
usage rates are applied. For Greece, the higher costs arise from high charges
associated with credit transfers. These transactions are significantly below the
NMS-12 averages in the country, (see section 3.5 for comparisons). These
findings suggest that the high costs may be inhibiting the development of credit
transfers or other electronic transactions in the country. For Lithuania, the high
rankings in EU profiles arise from charges on cheques, which are virtually
unused in the country according to the country-specific usage rates, (see
section 3.5);3 See Bank Fee Study for details and Annexes)
Background - the current rules
The EU has some of the toughest legislation on misleading and unfair practices in
the world. The EU's Unfair Commercial Practices Directive was adopted in 2005
and entered into force on December 2007. It contains a general clause banning
unfair commercial practices distorting consumers' economic behaviour. The Directive
regulates two key categories of unfair practices (misleading and aggressive): traders
must provide truthful information on their products and services, including their price.
They must also provide all the relevant information consumers need to make an
informed choice. The Directive covers online and offline commercial practices and
applies to all sectors, including financial services.
Enforcement of UCP Directive is the task of national authorities and courts. Member
States have an obligation to enforce EU consumer law in financial services as in
every other sector.
The new Payment Services Directive, to be implemented by 1 November 2009, will
improve the situation for certain charges, i.e. it contains information requirements on
the cost of a payment service (e.g. a standing order, direct debit or credit transfer). It
will help with transparency in terms of some kinds of fees covered by the report.

4. Switching
The sources
The data on switching used in the report draws on evidence collected in a special
Eurobarometer of July 2008 and reported in the 2009 edition of the Consumer
Scoreboard. It covered switching levels across eleven services including financial
services over the previous two years.

The main results

The switching rate is an important indicator of market health. For current bank
accounts, it remains low at only 9%, compared for instance with 25% for car
insurance. Difficulties in comparing offers are a key factor.

3
Accordingly, the European Commission’s Retail Banking Sector Inquiry Interim Report II
found that the estimated costs per payment transactions (which excluded cheque
transactions) in Lithuania was close to the European average calculated in the study.

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The report highlights the strong correlation between high switching rates and lower
prices of current accounts. The report finds that switching is good for the consumer,
but also good for the market in general.

Background - the current rules

On 1 December 2008, the Commission announced (IP/08/1841) that the European
banking industry had adopted a set of Common Principles for Bank Account
Switching, which will make it easier for consumers to switch their current account
from one bank to another within their own Member State. These Common Principles
are due to be implemented across the EU by 1 November 2009. (IP/09/1841)
Banks will provide consumers who want to switch their current account with clear
and complete information. The information provided will indicate the respective
responsibilities of the ‘former’ bank, the ‘new’ bank and the consumer, and the
timescales for the process as well as fees, if any, to be imposed.
The switching service will allow banks ten days in which to co-operate to arrange the
opening and closing of the accounts of customers who wish to switch, as well as
transferring balances and rearranging credit transfers. Where automated processes
are in place for information exchange, banks will offer a free of charge service. The
level at which banks may recover the cost of collecting information manually will be a
market decision left up to the individual bank.
The Commission will follow the implementation of the Common Principles closely, to
ensure that they do in fact produce concrete positive outcomes for the consumer. In
order to benchmark their effectiveness, the Commission will monitor their impact.

The Context:
Data in the Staff Working Paper - consumer over-indebtedness,
foreclosures and financial inclusion.
The report on financial services also includes findings on issues which serve as a
backdrop to the problems consumers are experiencing with information and advice,
fees and switching. These issues are consumer over-indebtedness, foreclosures and
financial inclusion. Although the figures relate to pre-crisis levels, they are useful as
additional context of the report.

The sources:
The data on debts and foreclosures draws on evidence mainly collected by the
European Credit Research Institute (ECRI) in 1995 – 2007 and by the European
Central Bank in 2006. The data for financial inclusion is based on a Commission
report of 2008.

Debt
- There has been a strong increase in the ratio of household debt to disposable
income, up by more than 50% since the early 90s, reaching 86% at the end of
2004.
- The outstanding loans granted to households for personal use in the
consumption of goods and services in the EU27 accounted for almost one
trillion euros in 2007.
- In 2007, the UK had by far the highest amount of outstanding consumer credit
per capita (€4,969), followed by Ireland (€4,258), Cyprus (€3,996) and Denmark
(€3,414). EU 12 Member States present low levels of indebtedness. Slovakia
(€229), Latvia (€314), Bulgaria (€477) and from the EU 15 Belgium (€1,334)
rank among the countries with the least indebted population.

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 Foreclosures
- 70% of a household's loan obligations are made up of mortgage credit.
- Commission services are currently seeking information from Member States on
the number of foreclosures; data show an increase for many Member States.
Financial Inclusion
- At the end of 2003, 10% of adults aged 18 and over in the EU 15 countries and
47 % of adults in the EU10 had no bank account at all whereas 6% to 8%
respectively have only very limited access to financial services.
The Commission services launched a consultation on "Financial Inclusion: Ensuring
access to a basic bank account" with the aim of collecting views on how financial
inclusion can be improved.
http://ec.europa.eu/internal_market/consultations/2009/financial_inclusion_en.htm

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ANNEX 1: Bank Fees: EU 27: Country by County profile on bank fees

AUSTRIA
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €140 on average.
Based on all the eight consumer usage profiles, Austria has high current account
prices on average: it ranks as 5th most expensive country in the EU. This is mainly
due to very high basic annual charges.
The tariffs of current bank accounts are below average in terms of transparency but
above average in terms of simplicity. Approximately 80% of the banks included in the
study had to be contacted to provide further details or to clarify the information
provided on their websites.
As regards the use of payments tools, Austria is part of the group of countries where
consumers have a preference for electronic transactions, which reach 77% of the
total.
The number of transactions per banked adult is above the EU average.
A 2008 Eurobarometer survey has revealed that, in Austria, 41% of consumers had
difficulties comparing current account offers. Only 6% of consumers have switched
their current account in the previous two years despite the fact that 58% of those
who did reported finding a cheaper provider. Austria has one of the lowest current
account switching rates in Europe.

BELGIUM
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €58 on average.
Based on all the eight consumer usage profiles, Belgium has low current account
prices on average: is in the 25th position in the EU. This is mainly due to very low
account and credit transfer charges.
The tariffs of current bank accounts are above average in terms of transparency and
simplicity. Approximately 50% of the banks included in the study had to be contacted
to provide further details or to clarify the information provided on their websites.
As regards the use of payments tools, Belgium is part of the group of countries
where consumers have a preference for electronic transactions, which reach 83% of
the total.
The number of transactions per banked adult is above the EU average.
A 2008 Eurobarometer survey has revealed that, in Belgium, 35% of consumers had
difficulties comparing current account offers. Only 7% of consumers have switched
their current account in the previous two years despite the fact that 65% of those
who did reported finding a cheaper provider.

BULGARIA
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €27 on average.
Based on all the eight consumer usage profiles, Bulgaria has the lowest current
account prices in the EU. This is mainly due to low basic and annual account
charges.

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The tariffs of current bank accounts are below average in terms of transparency but
above average in terms of simplicity. Approximately 70% of the banks included in the
study had to be contacted to provide further details or to clarify the information
provided on their websites.
As regards the use of payments tools, Bulgaria is part of the group of countries
where consumers have a preference for manual transactions which reach 53% of the
total.
The number of transactions per banked adult is the lowest in the EU.
A 2008 Eurobarometer survey has revealed that, in Bulgaria, 20% of consumers had
difficulties comparing current account offers. Only 10% of consumers have switched
their current account in the previous two years despite the fact that 40% of those
who did reported finding a cheaper provider.

CYPRUS
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €85 on average.
Based on all the eight consumer usage profiles, Cyprus has average current account
prices and is in the 13th position in the EU. This is mainly due to low basic annual
and account charges combined with high credit transfer charges.
The tariffs of current bank accounts are above average in terms of transparency but
below average in terms of simplicity. Approximately 70% of the banks included in the
study had to be contacted to provide further details or to clarify the information
provided on their websites.
As regards the use of payments tools, Cyprus is part of the group of countries where
consumers have a preference for manual transactions which reach 56% of the total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Cyprus, 25% of consumers had
difficulties comparing current account offers. Only 10% of consumers have switched
their current account in the previous two years despite the fact that 37% of those
who did reported finding a cheaper provider.

CZECH REPUBLIC
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €95 on average.
Based on all the eight consumer usage profiles, the Czech Republic has high current
account prices on average: it is in the 7th position in the EU. This is mostly due to
high basic annual charges.
The tariffs of current bank accounts are above average in terms of transparency but
below average in terms of simplicity. Approximately 80% of the banks included in the
study had to be contacted to provide further details or to clarify the information
provided on their websites.
As regards the use of payments tools, the Czech Republic is part of the group of
countries where manual transactions, although not higher than electronic
transactions, reach 42% of the total.
The number of transactions per banked adult is below the EU average.

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A 2008 Eurobarometer survey has revealed that, in the Czech Republic, 35% of
consumers had difficulties comparing current account offers. Only 9% of consumers
have switched their current account in the previous two years despite the fact that
64% of those who did reported finding a cheaper provider.

DENMARK
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €74 on average.
Based on all the eight consumer usage profiles, Denmark low current account prices:
it is in the 22nd position in the EU. This is mainly due to low debit card charges.
The tariffs of current bank accounts are below average in terms of transparency but
in line with the average in terms of simplicity. Approximately 60% of the banks
included in the study had to be contacted to provide further details or to clarify the
information provided on their websites.
As regards the use of payments tools, Denmark is part of the group of countries
where consumers have a strong preference for electronic transactions which reach
90% of the total.
The number of transactions per banked adult is the second highest in the EU.
A 2008 Eurobarometer survey has revealed that, in Denmark, 42% of consumers
had difficulties comparing current account offers. Only 10% of consumers have
switched their current account in the previous two years despite the fact that 54% of
those who did reported finding a cheaper provider.

ESTONIA
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €51 on average.
Based on all the eight consumer usage profiles, Estonia has low current account
prices on average: it is in the 21st position in the EU. This is mainly due to very low
basic annual charges.
The tariffs of current bank accounts are above average in terms of transparency and
simplicity. Approximately 30% of the banks included in the study had to be contacted
to provide further details or to clarify the information provided on their websites.
As regards the use of payments tools, Estonia is part of the group of countries where
consumers have a preference for electronic transactions which reach 82% of the
total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Estonia, 22% of consumers had
difficulties comparing current account offers. Only 9% of consumers have switched
their current account in the previous two years despite the fact that 60% of those
who did reported finding a cheaper provider.

FINLAND
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €104 on average.
Based on all the eight consumer usage profiles, Finland has high current account
prices on average: it ranks as the 6th most expensive country in the EU. This is
mainly due to high overall charges.

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The tariffs of current bank accounts are above average in terms of transparency and
simplicity. More than 70% of the banks included in the study had to be contacted to
provide further details or to clarify the information provided on their websites.
As regards the use of payments tools, Finland is part of the group of countries where
consumers have a strong preference for electronic transactions which reach 88% of
the total.
The number of transactions per banked adult is the highest in the EU.
A 2008 Eurobarometer survey has revealed that, in Finland, 37% of consumers had
difficulties comparing current account offers. Only 8% of consumers have switched
their current account in the previous two years despite the fact that 42% of those
who did reported finding a cheaper provider.

FRANCE
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €154 on average.
Based on all the eight consumer usage profiles, France has high current account
prices on average: it ranks as the 4th most expensive country in the EU. This is
mostly due to high basic annual charges and very high debit card charges.
The tariffs of current bank accounts are below average in terms of transparency and
below average in terms of simplicity. More than 50% of the banks included in the
study had to be contacted to provide further details or to clarify the information
provided on their websites.
As regards the use of payments tools, France is part of the group of countries where
manual transactions, although not higher than electronic transactions, reach 33% of
the total.
The number of transactions per banked adult is the fourth biggest in the EU.
A 2008 Eurobarometer survey has revealed that, in France, 48% of consumers had
difficulties comparing current account offers, the highest percentage in Europe. Only
11% of consumers have switched their current account in the previous two years
despite the fact that 41% of those who did reported finding a cheaper provider.
France has one of the top three current account switching rates in Europe.

GERMANY
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €89 on average.
Based on all the eight consumer usage profiles, Germany has high current account
prices on average: it ranks as the 9th most expensive country in the EU. This is
mainly due to high basic annual charges combined with high debit card charges.
The tariffs of current bank accounts are above average in terms of transparency and
simplicity. Less than 30% of the banks included in the study had to be contacted to
provide further details or to clarify the information provided on their websites.
As regards the use of payments tools, Germany is part of the group of countries
where consumers have a preference for electronic transactions which reach 81% of
the total.
The number of transactions per banked adult is in line with the EU average.

14
A 2008 Eurobarometer survey has revealed that, in Germany, 34% of consumers
had difficulties comparing current account offers. Only 7% of consumers have
switched their current account in the previous two years despite the fact that 90% of
those who did reported finding a cheaper provider. Germany has the highest
percentage of consumers who found a cheaper provider after switching.

GREECE
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €54 on average.
Based on all the eight consumer usage profiles, Greece has high current account
prices on average: it ranks as 10th most expensive country in the EU. This is mainly
due to high credit transfer charges.
The tariffs of current bank accounts are below average in terms of transparency and
below average in terms of simplicity. Approximately 90% of the banks included in the
study had to be contacted to provide further details or to clarify the information
provided on their websites.
As regards the use of payments tools, Greece is part of the group of countries where
consumers have a preference for manual transactions which reach 53% of the total.
The number of transactions per banked adult is the third lowest in the EU.
A 2008 Eurobarometer survey has revealed that, in Greece, 41% of consumers had
difficulties comparing current account offers. Only 12% of consumers have switched
their current account in the previous two years despite the fact that 55% of those
who did reported finding a cheaper provider. Greece has one of the top three current
account switching rates in Europe.

HUNGARY
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €76 on average.
Based on all the eight consumer usage profiles, Hungary has average current
account prices and is in the 15th position in the EU. High debt card charges are part
of the balance.
The tariffs of current bank accounts are below average in terms of transparency and
below average in terms of simplicity. Approximately 70% of the banks included in the
study had to be contacted to provide further details or to clarify the information
provided on their websites.
Based on the usage of payments tools, countries were assigned to groups reflecting
the preference for electronic versus manual operations. Hungary is part of the group
of countries where manual transactions, although not higher than electronic
transactions, reach 41% of the total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Hungary, 36% of consumers had
difficulties comparing current account offers. Only 8% of consumers have switched
their current account in the previous two years despite the fact that 79% of those
who did reported finding a cheaper provider. Hungary has one of the highest
percentages of consumers who found a cheaper provider after switching.

15
IRELAND
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €82 on average.
Based on all the eight consumer usage profiles, Ireland has average current account
prices and is in the 16th position in the EU. This is mostly due to high account
charges combined with low credit transfer charges.
The tariffs of current bank accounts are below average in terms of transparency but
in line with the average in terms of simplicity. More than 70% of the banks included in
the study had to be contacted to provide further details or to clarify the information
provided on their websites.
As regards the use of payments tools, Ireland is part of the group of countries where
manual transactions, although not higher than electronic transactions, reach 30% of
the total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Ireland, 30% of consumers had
difficulties comparing current account offers. Only 7% of consumers have switched
their current account in the previous two years despite the fact that 71% of those
who did reported finding a cheaper provider. Ireland has one of the highest
percentages of consumers who found a cheaper provider after switching.

ITALY
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €253 on average.
Based on all the eight consumer usage profiles, Italy has the highest current account
prices in the EU on average. This is due to all key charges being very high.
The tariffs of current bank accounts are below average in terms of transparency and
they have the lowest scores in terms of simplicity. More than 90% of the banks
included in the study had to be contacted to provide further details or to clarify the
information provided on their websites.
As regards the use of payments tools, Italy is part of the group of countries where
consumers have a preference for manual transactions which reach 64% of the total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Italy, 42% of consumers had
difficulties comparing current account offers, the second highest percentage in the
EU. Only 10% of consumers have switched their current account in the previous two
years despite the fact that 67% of those who did reported finding a cheaper provider.

LATVIA
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €115 on average.
Based on all the eight consumer usage profiles, Latvia has very high current account
prices on average: it ranks as 3rd most expensive country in the EU. This is mostly
due to high account and debit card charges.
The tariffs of current bank accounts are above average in terms of transparency and
simplicity. Approximately 50% of the banks included in the study had to be contacted
to provide further details or to clarify the information provided on their websites.

16
As regards the use of payments tools, Latvia is part of the group of countries where
manual transactions, although not higher than electronic transactions, reach 30% of
the total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Latvia, 18% of consumers had
difficulties comparing current account offers, one of the lowest percentages in
Europe. Only 7% of consumers have switched their current account in the previous
two years despite the fact that 41% of those who did reported finding a cheaper
provider.

LITHUANIA
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €35 on average.
Based on all the eight consumer usage profiles, Lithuania has average current
account prices and is in the 12th position in the EU.
The scores for the tariffs of current bank accounts are among the highest in terms of
transparency and simplicity. Approximately 30% of the banks included in the study
had to be contacted to provide further details or to clarify the information provided on
their websites.
Based on the usage of payments tools, countries were assigned to groups reflecting
the preference for electronic versus manual operations. Lithuania is part of the group
of countries where consumers have a strong preference for electronic transactions
which reach 87%of the total.
The number of transactions per banked adult is significantly below the EU average.
A 2008 Eurobarometer survey has revealed that, in Lithuania, 9% of consumers had
difficulties comparing current account offers, the lowest percentage in Europe. Only
10% of consumers have switched their current account in the previous two years
despite the fact that 31% of those who did reported finding a cheaper provider.

LUXEMBOURG
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €57 on average.
Based on all the eight consumer usage profiles, Luxembourg has low current
account prices on average: is in the 20th position in the EU. This is mostly due to low
account charges.
The tariffs of current bank accounts are above average in terms of transparency and
simplicity. Approximately 60% of the banks included in the study had to be contacted
to provide further details or to clarify the information provided on their websites.
As regards the use of payments tools, Luxembourg is part of the group of countries
where consumers have a preference for electronic transactions which reach 80% of
the total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Luxembourg, 28% of consumers
had difficulties comparing current account offers. Only 6% of consumers have
switched their current account in the previous two years despite the fact that 44% of
those who did reported finding a cheaper provider. Luxembourg has one of the
lowest current account switching rates in Europe.

17
MALTA
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €72 on average.
Based on all the eight consumer usage profiles, Malta has low current account prices
on average: is in the 23rd position in the EU. This is mainly due to low basic annual
charges and credit transfer charges.
The tariffs of current bank accounts are above average in terms of transparency and
simplicity. All of the banks included in the study had to be contacted to provide
further details or to clarify the information provided on their websites.
Based on the usage of payments tools, countries were assigned to groups reflecting
the preference for electronic versus manual operations. Malta is part of the group of
countries where manual transactions, although not higher than electronic
transactions, reach 44% of the total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Malta, 31% of consumers had
difficulties comparing current account offers. Only 7% of consumers have switched
their current account in the previous two years despite the fact that 24% of those
who did reported finding a cheaper provider.

NETHERLANDS
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €46 on average.
Based on all the eight consumer usage profiles, the Netherlands has low current
account prices on average: is in the 26th position in the EU. This is mostly due to very
low account charges.
The scores for the tariffs of current bank accounts are among the highest in terms of
transparency and simplicity. Approximately 50% of the banks included in the study
had to be contacted to provide further details or to clarify the information provided on
their websites.
As regards the use of payments tools, the Netherlands is part of the group of
countries where consumers have a strong preference for electronic transactions
which reach 92% of the total.
The number of transactions per banked adult is above the EU average.
A 2008 Eurobarometer survey has revealed that, in the Netherlands, 28% of
consumers had difficulties comparing current account offers. Only 5% of consumers
have switched their current account in the previous two years despite the fact that
43% of those who did reported finding a cheaper provider. Netherlands has the
lowest current account switching rates in Europe.

POLAND
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €73 on average.
Based on all the eight consumer usage profiles, Poland has average current account
prices and is in the 19th position in the EU.

18
The tariffs of current bank accounts are below average in terms of transparency and
below average in terms of simplicity. Approximately 80% of the banks included in the
study had to be contacted to provide further details or to clarify the information
provided on their websites.
As regards the use of payments tools, Poland is part of the group of countries where
manual transactions, although not higher than electronic transactions, reach 43% of
the total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Poland, 22% of consumers had
difficulties comparing current account offers. Only 8% of consumers have switched
their current account in the previous two years despite the fact that 64% of those
who did reported finding a cheaper provider.

PORTUGAL
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €45 on average.
Based on all the eight consumer usage profiles, Portugal has low current account
prices on average: is in the 24th position in the EU. This is mainly due to very low
account charges.
The tariffs of current bank accounts are above average in terms of transparency and
simplicity. Approximately 70% of the banks included in the study had to be contacted
to provide further details or to clarify the information provided on their websites.
Based on the usage of payments tools, countries were assigned to groups reflecting
the preference for electronic versus manual operations. Portugal is part of the group
of countries where consumers have a preference for electronic transactions which
reach 83% of the total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Portugal, 32% of consumers had
difficulties comparing current account offers. Only 8% of consumers have switched
their current account in the previous two years despite the fact that 64% of those
who did reported finding a cheaper provider.

ROMANIA
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €83 on average.
Based on all the eight consumer usage profiles, Romania has average current
account prices and is in the 14th position in the EU.
The tariffs of current bank accounts are below average in terms of transparency but
above average in terms of simplicity. More than 70% of the banks included in the
study had to be contacted to provide further details or to clarify the information
provided on their websites.
As regards the use of payments tools, Romania is part of the group of countries
where consumers have a preference for manual transactions which reach 90% of the
total.
The number of transactions per banked adult is the second lowest in the EU.

19
A 2008 Eurobarometer survey has revealed that, in Romania, 33% of consumers
had difficulties comparing current account offers. Only 10% of consumers have
switched their current account in the previous two years despite the fact that 33% of
those who did reported finding a cheaper provider.

SLOVAKIA
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €74 on average.
Based on all the eight consumer usage profiles, Slovakia has average current
account prices and is in the 11th position in the EU.
The tariffs of current bank accounts are above average in terms of transparency and
simplicity. Approximately 60% of the banks included in the study had to be contacted
to provide further details or to clarify the information provided on their websites.
As regards the use of payments tools, Slovakia is part of the group of countries
where consumers have a preference for electronic transactions which reach 75% of
the total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Slovakia, 31% of consumers had
difficulties comparing current account offers. Only 9% of consumers have switched
their current account in the previous two years despite the fact that 49% of those
who did reported finding a cheaper provider.

SLOVENIA
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €100 on average.
Based on all the eight consumer usage profiles, Slovenia has high current account
prices on average: it ranks as the 8th most expensive country in the EU. This is
mainly due to high basic annual charges.
The tariffs of current bank accounts are above average in terms of transparency and
simplicity. Approximately 70% of the banks included in the study had to be contacted
to provide further details or to clarify the information provided on their websites.
Based on the usage of payments tools, countries were assigned to groups reflecting
the preference for electronic versus manual operations. Slovenia is part of the group
of countries where manual transactions, although not higher than electronic
transactions, reach 32% of the total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Slovenia, 24% of consumers had
difficulties comparing current account offers. Only 7% of consumers have switched
their current account in the previous two years despite the fact that 51% of those
who did reported finding a cheaper provider.

SPAIN
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €178 on average.

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Based on all the eight consumer usage profiles, Spain has very high current account
prices: it is the second most expensive country in the EU. This is due to all key
charges being very high.
The tariffs of current bank accounts are below average in terms of transparency and
below average in terms of simplicity. More than 90% of the banks included in the
study had to be contacted to provide further details or to clarify the information
provided on their websites.
As regards the use of payments tools, Spain is part of the group of countries where
consumers have a preference for electronic transactions which reach 75% of the
total.
The number of transactions per banked adult is below the EU average.
A 2008 Eurobarometer survey has revealed that, in Spain, 27% of consumers had
difficulties comparing current account offers. Only 15% of consumers have switched
their current account in the previous two years despite the fact that 59% of those
who did reported finding a cheaper provider. Spain has the highest current account
switching rate in Europe.

SWEDEN
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €62 on average.
Based on all the eight consumer usage profiles, Sweden has average current
account prices and is in the 18th position in the EU. This is mainly due to very low
account charges combined with high debt card charges.
The tariffs of current bank accounts are above average in terms of transparency and
simplicity. Approximately 70% of the banks included in the study had to be contacted
to provide further details or to clarify the information provided on their websites.
As regards the use of payments tools, Sweden is part of the group of countries
where consumers have a preference for electronic transactions, which reach 85% of
the total.
The number of transactions per banked adult is above the EU average.
A 2008 Eurobarometer survey has revealed that, in Sweden, 40% of consumers had
difficulties comparing current account offers. Only 8% of consumers have switched
their current account in the previous two years despite the fact that 53% of those
who did reported finding a cheaper provider.

UNITED KINGDOM
The price of a current account, for an average usage profile which reflects domestic
preferences, is about €103 on average.
Based on all the eight consumer usage profiles, the United Kingdom has average
current account prices and is in the 17th position in the EU. This is mostly due to
most charges being very low combined with very high account charges.
The tariffs of current bank accounts are below average in terms of transparency but
above average in terms of simplicity. More than 50% of the banks included in the
study had to be contacted to provide further details or to clarify the information
provided on their websites.

21
As regards the use of payments tools, the UK is part of the group of countries where
consumers have a strong preference for electronic transactions which reach 88% of
the total.
The number of transactions per banked adult is the third highest in the EU.
A 2008 Eurobarometer survey has revealed that, in the UK, 24% of consumers had
difficulties comparing current account offers. Only 9% of consumers have switched
their current account in the previous two years despite the fact that 44% of those
who did reported finding a cheaper provider.

i
Keeping in mind that the official price lists are the only sources of price information for the present
study.
ii
The findings in points 1 and 2 are, by and large, in line with the European Commission’s Retail
Banking Sector Inquiry Interim Report II (released on 17 July 2006). The report’s results on account
usage and pricing were based primarily on a market survey of 234 banks. The findings confirm that
charges on account management and selected payment transactions (only corresponding to fees on
credit transfers, standing orders and direct debits) were extremely high in Italy (p.89). In Latvia,
charges were also found to be high for the covered payment transactions, even though charges on
cheques were excluded. The Commission’s report does not consider charges on card transactions,
which could explain why our findings for France are not echoed in the report. For Spain, the report
finds that the account management fees are below the EU-27 averages, which may be taking into
account the actual prices resulting from case-by-case negotiations between the banks and their
customers.
iii
As remarked in Annex 7, basic annual charges comprise package and account maintenance fees
while account charges include charges on opening/closing accounts, overdrafts, insufficient funds,
OTC transactions, account movement, internet and phone banking as well as income from credit
interest.
iv
The finding on Portugal runs somewhat counter to the results of the European Commission’s Retail
Banking Sector Inquiry Interim Report II. One reason could be the exclusion of a number of key
transactions from the analysis provided in the report. It is also possible that the services have become
cheaper since 2004, the year that the survey for the report was conducted.
v
Belgium and the Netherlands were also found to have low-cost current accounts in the European
Commission’s Retail Banking Sector Inquiry Interim Report II.
vi
These findings are in line with the European Commission’s Retail Banking Sector Inquiry Interim
Report II, which found that the estimated costs per payment transactions (which cover credit
transfers as well as direct debits) are above the European averages in both countries, (pg. 89). Much
like our study, the charges in Finland were found to be greater.

22