French Bank Tariffs 'Incomprehensible'
Tuesday 06 April 2021
The banks are accused of burying the comparability of their offers by drowning consumers in an incomprehensible list of charges.
In recent years, mainly at the behest of the European Commission, the French government have done much to increase bank transparency, to cap charges, and to provide a stronger framework for greater competition.
Amongst the key measures introduced has been to require banks to use a common terminology for their main charges and to require them to provide clients with improved information on charges they incur.
Despite these improvements, in a recent joint study undertaken by several consumer bodies in France, the group says further tightening of the regulations is necessary.
The group consider that there has been a decline in the legibility of many bank tariff brochures due to inflation in the number of charges. We reported recently, for instance, on the charges for closing an account on an inheritance.
They consider this is occurring in order to reducing the comparability of their offers and thereby the risk that clients will want to switch their bank.
Bank mobility in France is only around 2.5% a year and bank charges on their clients amount to around €25 billion a year.
As proof, the authors that in 2021 the banks' tariff brochures have an average of 390 tariffs on 27 pages.
Some banks completely drown consumers under the weight of information: the brochure of charges from Société Générale runs to 55 pages, and that of the Caisse d’épargne Grand Est contains no less than 612 charges.
To facilitate comparison between offers, and under pressure from consumer associations, in 2010 the banks committed themselves to publish on the first page of their brochure a standard extract of tariffs containing the prices for their most common services.
However, as the statutory advisory body, the Comité consultatif du secteur financier (CCSF) reported earlier this year, this practice is fast disappearing, with 1 in 5 bank customers not able to access the standard list of main charges.
Retail banks who removed it include BNP Paribas, Societe Generale, Crédit du Nord, and HSBC. Some of the new neo-banks are also failing to comply, notably ING Direct, Boursorama and Hello Bank!
The group considers that a ‘cover-up’ is taking place, that auto-regulation has failed, and that the government should legislate.
Despite the lack of transparency, it would not be true to say that bank charges have increased significantly. The CCSF recently reported that over the past year prices have generally remained stable, as was the case in 2019.