French Bank Charges Go Down

A recent survey of French bank charges shows that, contrary to the significant rises that have occurred in the UK, French banks actually reduced their charges in 2007.

In the national survey carried out by the consumers' organisation Confédération de la Consommation, du Logement et du Cadre de Vie (CLCV) and the magazine Mieux Vivre Votre Argent, it was found that, on average, bank charges had gone down by 8%.

Whilst the average annual cost of running a bank account is now estimated at €243, the survey found that petit consommateurs of bank services could run their bank account for as little as around €45 a year.

The cheapest bank in the national survey was actually in Limousin, at the Credit Agricole Centre France, where the estimated annual cost of running an account requiring few services was an economy price of €36.

The services offered on such an account would include at least 30 debits per month (including six cheques), eight withdrawals a month, sixty minutes of calls to a bank call centre, an international debit card (Maestro), and six directs debits.

Overall, however, it was Banque Paribas and La Banque Postal, who between them offered the lowest general rates. La Banque Postale was the clear winner last year, but has been caught up this year by Banque Paribas, particularly insofar as the petit consommateur is concerned, where it achieves a clear first place. La Banque Postale continues to be the least expensive bank for average users and high rollers.

The authors of the survey have published the full results of the survey on the internet , with a questionnaire tool that will help you select the bank in the area of your choice that is likely to offer you the cheapest service.

The one missing element in the survey is the cost of international transfers, likely to be an important factor for readers of this newsletter! On this point, EU rules require that banks are not entitled to charge any more for an international Euro transfer than they are for the same transfer made within their home country.

Accordingly, we conducted our own survey of French banks to establish the cost of international transfers within the rules laid down by the EU. We found that in the vast majority of cases a Euro bank transfer to the UK was either around €4, or free of charge. These charges seemed to be in line with bank charges for bank transfers within France.

However, a majority did make a charge for the receipt of an international bank transfer from the UK (average around €17), to which must also be added the charge of the sending bank itself. In some measure, it depends on the bank transfer system that is used, as different systems have different charges.

The charges made by UK banks for international bank transfers are amongst some of the highest in Europe, a subject that we cover in greater detail in our Guide to Banking in France, and which we shall come back further to in due course in the newsletter.

Part of the explanation for the general reduction in bank charges in France, has been the growth of competition from French internet banks.

There has also been pressure from the French Government, who recently intervened to impose upon banks greater transparency concerning their charges. French banks have always been required to provide a list of tariffs, but they are sometimes written in a language that even the French themselves do not understand.

Accordingly, following a long campaign by consumer groups, French banks are now obliged to provide all their customers with at least an annual breakdown of charges incurred in the year, with the first statement obligatory from January 2009.

Read more in our Guide to Banking in France.