emercato The completion of the Internal Market in retail financial services: the consumers perspective Argomenti Dominique Forest

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1 Argomnti Th compltion of th Intrnal Markt in rtail financial srvics: th consumrs prspctiv Dominiqu Forst Sintsi a cura di Luisa Crisigiovanni L spcificità di srvizi finanziari pr i consumatori non possono ssr ignorat: l opacità dll offrta, la difficoltà nll ottnr informazioni chiar, complt comparabili, l immobilità forzata di consumatori sono tutti fattori ch mttono in vidnza lo squilibrio tra i consumatori gli opratori ch costituiscono un grosso ostacolo alla concorrnza. L intgrazion dl mrcato di srvizi finanziari potrbb in toria rapprsntar un bnficio pr i consumatori. Tuttavia, tali potnziali bnfici si riducono al minimo in caso di mancanza di trasparnza dll offrta o di mancanza di fiducia dl consumator. In tal sttor, l asimmtria tra consumatori opratori in trmini di informazioni conoscnz è particolarmnt lvata. Scondo una rcnt indagin condotta dall Autorità britannica pr i srvizi finanziari, i consumatori non compiono i passi ncssari pr scglir il prodotto ch va maggiormnt incontro all propri ncssità. Qusto è dovuto alla natura di srvizi finanziari, particolarmnt complssi, ma anch al comportamnto dgli opratori finanziari volti a sviluppar stratgi di markting ch puntano a rndr un srvizio global. Informazioni complss, difficili da ottnr 72 I srvizi finanziari sono ssnzialmnt un mix di diritti dovri sia pr gli opratori sia pr i consumatori. Ciò rnd l informazioni ancora più complss difficilmnt comparabili. Di consgunza, è difficil supporr ch un aumnto dlla concorrnza o un stnsion dlla possibilità di sclta siano di pr sé vantaggios pr i consumatori. L associazion di consumatori francs UFC-Qu Choisir ha idntificato, pr il solo 2003, più di 180 diffrnti costi nl mrcato di srvizi finanziari al dttaglio. Spsso i consumatori non sanno sattamnt pr quali srvizi pagano dtrminati costi, anch prché spsso uno stsso srvizio può assumr nomi diffrnti s fornito da un oprator o da un altro. In Danimarca 7 consumatori su 10 hanno dichiarato di non ricvr informazioni chiar sul proprio C/C, né di fidarsi. Dominiqu Forst Snior conomic advisor - BEUC Luisa Crisigiovanni Altroconsumo Associazion Indipndnt di Consumatori Consumatori, Diritti Argomnti DirittiMrcato Mrcato

2 In Italia, nl 2005, quasi il 20% di consumatori ha dichiarato nl corso di un indagin condotta da Altroconsumo di non sapr quanto spnd pr il proprio conto corrnt, mntr il 51% ha dichiarato di non sapr quanto paga annualmnt pr l utilizzo dlla carta bancomat. Inoltr, coloro ch crdono di sapr quanto spndono, gnralmnt sbagliano. La constatazion dll immobilità di consumatori si ritrova all intrno dll indagin sttorial dlla Dirzion Gnral Concorrnza dlla Commission uropa dl luglio 2006 in applicazion dl Rgolamnto 1/2003. Poiché i consumatori incontrano molt difficoltà nl rcuprar nl comparar l informazioni, non ci si dv sorprndr s i consumatori si attivano pr cambiar banca conto corrnt solo a sguito di problmi con la propria banca. La ragion principal pr cui un corrntista dcid di cambiar istituto è dirttamnt corrlata al grado di insoddisfazion ni confronti dlla banca di appartnnza. Molti consumatori vorrbbro divorziar dalla propria banca, ma non s lo possono prmttr, soprattutto a causa di costi lvati pr l stinzion dl conto corrnt ch, nlla maggior part di casi, rapprsntano un vro proprio ostacolo alla mobilità. Tali costi dovrbbro in ogni caso avr limiti prcisi da rispttar soprattutto ssr in lina con i rali costi ch qusta oprazion comporta. 1 Il problma lgato alla mobiltà di consumatori va comunqu oltr il problma di costi di chiusura. I pacchtti sono un ottima cosa pr la fidlizzazion dl clint, ma hanno un impatto ngativo in trmini di trasparnza, poiché sono ovviamnt studiati pr rndr più difficil la comparazion dll propri offrt con qull di concorrnti. Non dovrbb, inoltr, sistr l obbligo di aprir un conto corrnt in una banca pr potr acquistar altri prodotti/srvizi o vicvrsa. Cambiar la propria banca, quindi, divnta più costoso. Anch i corrntisti spsso non slzionano i prodotti da insrir nl pacchtto finiscono col comprar pagar più prodotti srvizi di qulli di cui hanno vramnt bisogno. L asimmtria informativa, la moltiplicazion dll commissioni, l allinamnto di przzi, in alcuni Stati, il potr di mrcato limitato di consumatori sono lmnti ch portano al rischio di una tacita collusion tra opratori dl sttor bancario. Efficinza rgolamntar d fficacia di controlli Fatto salvo quanto su sposto, è abbastanza difficil immaginar ch rgol non complss possano ssr fficaci nl rgolamntar il sttor di srvizi finanziari. Nonostant ciò, a livllo uropo una part dlla discussion sulla miglior rgolamntazion è corrlata all aumnto dlla tndnza a far affida- 1 Significativo è notar la rcidiva ch mrg dal monitoraggio condotto da Altroconsumo sui costi di chiusura di C/C a sguito dll introduzion dl divito di sps di chiusura prvisto dall Art. 10 dlla Lgg 248/2006: 11 banch a gnnaio 12 banch a maggio 2007 dll 35 monitorat continuano a sigr commissioni sps com onri accssori alla chiusura dl C/C pr trasfri- mnto titoli. Consumatori, DirittiMrcato Diritti Mrcato Argomnti 73

3 mnto nlla cosiddtta Commission Lamfalussy, costituita da rapprsntanti dgli Stati mmbri, al fin di adattar, smplificar compltar lo scnario lgislativo anch nll ara di srvizi finanziari. Qusto non smpr avvin tnndo in considrazion il punto di vista di consumatori di chi li rapprsnta. Inoltr, il momnto politico ha bisogno di ssr considrato quando si valutano vlocità d fficinza dlla rgolamntazion si pavnta un rallntamnto o appsantimnto dll norm laddov qust dbbano contmprar l impatto sui consumatori. Pr smpio, il Rgolamnto sui pagamnti transfrontaliri in uro è stato adottato in un lasso di tmpo molto brv proprio prché ci si trovava nlla fas di transizion vrso una monta unica. Un lmnto indispnsabil pr stimolar la fiducia di consumatori è garantir un lvato uniform livllo di tutla di loro diritti. La fiducia di consumatori vin mno s non possono far affidamnto sull norm, ch già conoscono poco, dl loro ordinamnto nazional. Infin, il coordinamnto dll autorità di vigilanza dl sttor non può far vnir mno la possibilità dll Autorità nazionali di intrvnir anch ritirando la licnza ai fornitori di srvizi finanziari ch non rispttino la normativa, prgiudicando gli intrssi di consumatori. Il caso dl SEPA Il Singl Europan Paymnt Ara è un iniziativa voluta portata avanti dall industria pr prmttr ai cittadini, all imprs agli altri attori conomici di ffttuar ricvr pagamnti in uro all intrno dl trritorio comunitario, con l stss condizioni, con i mdsimi diritti dovri a prscindr dal loro luogo di rsidnza. Gli standard rlativi al SEPA andranno, quindi, a impattar dirttamnt sull carattristich di prodotti disponibili ai consumatori a livllo nazional, sia dal punto di vista di przzi sia dll modalità di rogazion di srvizi (cart di pagamnto, prlivi prsso bancomat trasfrimnti di crditi) da part dll banch. Molt incrtzz sono, tuttavia, ancora lgat all intrprtazion all implmntazion dlla Dirttiva sui Srvizi di Pagamnto, pr potr dir ch qusta armonizzazion sia vantaggiosa pr i consumatori. Pr smpio, pr quanto riguarda l incrtzza sull onr dlla prova sulla rsponsabilità in caso di mzzi di pagamnto andati prduti o rubati; il rischio di un passaggio a srvizi mno fficinti o più cari di qulli attualmnt offrti a livllo nazional; infin, nl caso non si possida un conto corrnt, il rischio d inaccssibilità di alcuni prodotti. 74 Consumatori, DirittiMrcato Diritti Mrcato Argomnti

4 Introduction Th achivmnt of th Intrnal Markt has bn at th hart of th projct of Europan intgration, sinc th vry bginning for coal and stl (ECSC( Traty) or mor globally with th Rom Traty and th cration of th Europan Economic Community. For a long tim, th goods or agricultural product markts wr mor of a priority than th financial srvics on. Aftr th intgration procss was r-launchd with th Singl Europan Act, th Financial Srvics Action Plan launchd in May 1999 aimd at complting th Singl Markt in wholsal financial srvics, and at dvloping opn and scur rtail financial srvics markts. Th lattr priority has bn confirmd in th Whit Papr of th Europan Commission on Financial Srvics Policy ( ), and in th Grn Papr on Rtail Financial Srvics. Howvr, th spcificitis of rtail financial srvics for consumrs cannot b ignord. Th opacity of offrs, th difficultis obtaining clar, complt and comparabl information, th forcd immobility of consumrs highlight th imbalanc in trms of markt powr btwn consumrs and oprators, and constitut as many obstacls to comptition. Ths problms hav an impact on th mannr in which th intgration of rtail financial srvics must b nvisagd, not only from th point of viw of th lgislator, but in trms of political priority. Consumrs and rtail financial srvics Th intgration of rtail financial srvics could in thory bnfit consumrs, sinc it would allow thm to rap substantial financial gains (pric rductions or bttr quality of srvics through nhancd comptition). Howvr, ths potntial bnfits would b rducd to nothing is consumrs confidnc is calld into qustion, or in cas of lack of transparncy of offrs, wak mobility or limitd comptition. Pculiar markts for consumrs Rtail financial srvics markts do not prsnt th sam charactristics as good markts. In particular th asymmtry in trms of information and (tchnical) knowldg btwn consumrs and providrs is particularly high. Th profssionals hav an undisputabl advantag in trms of information and tchnical knowldg. 2 2 «Th mind of th mrchant, th lawyr, th physician, and th man of scinc, bcoms gradually quippd with a stor of knowldg and a faculty of intuition, which can b obtaind in no othr way than by th continual application of th bst fforts of a powrful thinkr for many yars togthr to on mor or lss narrow class of qustions.» In Alfrd Marshall (1920), Principls of Economics, Book IV, Chaptr 9, paragraph 3. Consumatori, DirittiMrcato Diritti Mrcato Argomnti 75

5 It sms highly improbabl that financial ducation of consumrs as such will do away with ths asymmtris. It is not ralist to imagin that th avrag consumr would b abl to grasp th subtltis of highly complx products. Th nlightnd amatur in financial srvics will most probably find it difficult to achiv th sam lvl of xprinc or vn a sufficint on as compard to th profssionals. It is highly doubtful that consumrs hav bcom incrasingly sophisticatd and possss a broad rang of skills and abilitis to mak thir choics, spcially with nw and mor complicatd rtail financial srvics products apparing all th tim. According to a rsarch conductd by th UK Financial Srvics Author- ity, «popl do not tak adquat stps to choos products to mt thir nds. Most housholds spnd matrial amounts on financial srvics, yt many do not shop around to find a good dal». «Th distribution of scors shows rlativly fw popl dmonstrating bhaviours that would b considrd mor capabl. Evn of thos who hav bought financial products, approximatly on third ar clarly not vry capabl at choosing thm». 3 This has to do with th natur of financial srvics, but also to th incrasing complxity of products, linkd to th bundls, as wll as to th willingnss of financial actors to dvlop a global rlationship with thir customrs. A complx information, hard to obtain Financial srvics ar in ssnc a mix of rights and obligations, for th providr as wll as for th consumr. This naturally rndrs th information mor complx, and maks it mor difficult to compar btwn offrs. As a consqunc of this, on cannot assum that an incrasd comptition or an xtnsion of choic pr s would ncssarily bnfit consumrs. As an xampl, in th UK mor than financial srvics products ar on offr. For ssntial financial srvics such as mortgag crdits, complxity of products and information asymmtry ar all th mor problmatic sinc th risks and consquncs of a bad dcision ar substantial. Byond ths aspcts, th numbr and th multiplication of tariffs, th lack of clarity of th srvics covrd ful confusion. Th Frnch consumrs association UFC - Qu Choisir had idntifid mor than 180 chargs in th fild of rtail bank- ing alon in 2003 in Franc 4 (bank account, bank card, bank transfrs, paymnt incidnts, loans). Various chargs for advic, ncoding or intrvntion can b claimd, without th consumr knowing xactly what thy covr. Tariff innovation rsults in th absnc of standardisation of th lablling of srvics considrd, th non linarity of tarification (th sam srvic can b fr for a crtain numbr of Frais bancairs - ls Français xignt un factur séparé, Etud IFOP/ /UFC/ - Qu Choisir, Mars Consumatori, DirittiMrcato Diritti Mrcato Argomnti

6 oprations, and thn th customr is bing chargd), whilst for othr oprators a complx charging formula is applid. Th sam srvic can also b found undr diffrnt nams from on providr to th nxt, which highlights th nd for a common public domstic glossary of rtail banking vocabulary in ordr to facilitat customrs undrstanding of th trminology and ability to compar offrs ( sam words for th sam srvics ). In Dnmark in 2005, 7 out of 10 consumrs statd that thy found bank prics confusing, which suggsts a lack of transparncy, and that thy did not trust th public pric lists. 5 In Italy, 6 in 2005 narly 20% of consumrs dclard not knowing how much thy paid for thir currnt account whilst 51% dclard not knowing how much thy pay pr yar for using ATMS. And thos who blivd thy knw wr gnrally wrong. Th accss to ths tariffs is also difficult. In spit of th commitmnt of Frnch banks in Novmbr 2004 that all tariffs would b asily accssibl on Intrnt and in branchs as laftlts, a survy conductd by th Frnch consumrs association CLCV bginning of 2006 in 280 branchs covring 10 ntworks has showd that in only 50% of cass tariff laflts wr availabl. 7 This was confirmd by a 2007 survy, 8 which indicatd that although som progrss has bn mad, a lot still nds to b don in this rspct. Th obligation for Frnch banks to mak a list of automatic and rcurring transactions availabl for a rasonabl pric has bn rspctd, but this has ld som banks to crat a nw tariff lin for this srvic, which is chargd 30 uros in svral branchs of Crédit Agricol and Société Général. This lads to th situation whr consumrs gt th information only aftr thy hav signd th contract. 9 As a rsult of limitd transparncy, information asymmtry and th complxity of products, consumrs might us imprfct proxis such as brands, rputation or proximity of th providr (bank-nxt-door) instad of analyzing prics, quality of srvic, contract trms and conditions. This will impact comptition as such, sinc for instanc markting might play a biggr rol than th quality of th offrs thmslvs, rsulting in small playrs with mor limitd rsourcs/nw ntrants with a limitd brand rcognition not bing abl to match th activism of biggr oprators. Consumr immobility, caus and consqunc of th lack of comptition In a markt whr pric transparncy is limitd, and th cost of acquiring information is high, th lvl of comptition btwn markt actors is ncssarily mor limitd. This immobility of consumrs has bn highlightd for xampl in th framwork of th sctoral invstigation of th Dirctorat Gnral Comptition of th 5 mddllsr_2005/rapportgbyrr.pdf. 6 Altroconsumo, March Banqus: ds ngagmnts non tnus!, Confédération Logmnt t Cadr d Vi, Avril-Mai-Juin Tarification bancair: l nquêt annull d la CLCV. En collaboration avc Miux Vivr Votr Argnt, CLCV, Banqus - l compt n y st pas, UFC - Qu Choisir n. 425, April Consumatori, DirittiMrcato Diritti Mrcato Argomnti 77

7 Europan Commission. 10 If information is hard to gt, and comparability difficult, it should b no surpris that consumrs ar not ncssarily looking for bst dals, vn whn bttr offrs ar availabl on th markt. Consumrs dcision to switch would thn b basd primarily on dissatisfaction with thir currnt bank. Howvr, this is not vn th cas: in Blgium, 8 out of 10 consumrs hav not changd banks ovr th last 10 yars in spit of 65% of thm not bing satisfid with th srvic offrd. In th UK in 2005, lss than 5% of consumrs had changd banks ovr th last two yars, in spit of 35% of consumrs bing annoyd with thir banks, and th currnt account markt bing dominatd by four big banks: Lloyds TSB, Barclays, NatWst and HSBC (as 70% of consumrs bank with thm) non of thm offring th bst currnt accounts. 11 In this rspct, th so-calld satisfaction of consumrs has to b considrd with caution. Sinc a larg proportion of consumrs do not hav a prcis ida of how much thir bank costs thm and how much th sam lvl of srvic would cost in anothr bank, thir ability to compar altrnativ offrs is svrly constraind as a rsult. Bsids, th quality of srvics is oftn difficult to assss, and consumrs ar not wll awar of thir rights and obligations in th vr mor complx fild of financial srvics, including undr thir own national ruls. Most consumrs would lik to divorc, but cannot afford to. Closing fs for bank accounts ar problmatic in this rspct sinc thy hav a ngativ impact on th capacity/willingnss of consumrs to chang providr. In Austria, for xampl, according to th Austrian consumrs organisation VKI, 12 closing fs for a bank account varid btwn 5 uros and 25 uros, th avrag bing around 12 uros in Closing fs for a bank account should in any cas b limitd and in lin with ral costs. Ths fs should b forbiddn whn th dcision of closing th account rsults from non accptanc of nw banking or contractual conditions. Howvr, consumrs mobility gos much byond th problm of closing fs. Th capacity of consumrs to choos btwn providrs/products or srvics (transparncy of information, comparability of offrs) and thir capacity to xrt thir capacity to choos (no obstacls to switching/consumrs mobility, lvl of comptition on th markt) hav to b takn into account. In 2004, UFC-Qu Choisir had assssd th opportunity costs linkd to switching bank in Franc to around 335 uros. 13 Bsids th chargs imposd on consumrs for closing a bank account at th tim, othr costs hav to b takn into account, (transfr of contracts, for xampl, costs of lost paymnts, administrativ fs, that is to say th ncssity to snd lttrs, to fill in forms, th tim lost in looking for a nw providr). Th rd tap linkd to changing bank accounts has to b lightnd as wll. In Austria, additional fs ar chargd for spcific srvics such as prmannt Intrim Rport II Currnt Accounts and rlatd srvics, Sctor Inquiry undr Articl 17 Rgulation, 1/2003 on rtail banking, 17th July Giv us back our mony, Which?, July Banknwchsl - Auf Nimmrwidrshn!, Konsumnt, 3/2005, pp Etud sur l coût ds srvics bancairs, UFC - Qu Choisir, Juillt Consumatori, DirittiMrcato Diritti Mrcato Argomnti

8 ordr. In gnral, banks willing to attract consumrs propos to tak car of buraucratic tasks - but do not covr closing fs. Mor gnrally, switching currnt accounts can b a complx opration for consumrs bcaus of th rang of vryday functions that ar conductd through th account. Filling in th ncssary forms for opning a nw account, closing th old on, transfrring balancs, transfrring dirct dbits, stting up paymnt instructions, informing customrs about th nw account numbr can b tim-consuming In addition, thr is a risk that dirct dbits or othr transactions might b lost. In Italy for instanc, it can tak mor than 2 months to switch a currnt account to anothr bank. Packags hav a ngativ impact in trms of transparncy as thy mak it mor difficult for consumrs to compar offrs and prics. Bsids, it incrass consumrs rlianc on thir bank and thus it might b mor difficult for a consumr to xit a contractual rlationship or hav mor than on bank. For instanc, a consumr can far for that th intrst rat h obtaind for his mortgag crdit is calld into qustion if h switchs bank account providr. Also, consumrs may not nd up gtting th bst dal. If th consumr has subscribd or subscribs to a packag of banking srvics, it is highly probabl that at last som of ths srvics will ovrlap and will lad to a costly doubl charging. It is vidntly not a solution in this rspct to rsort to a gradual switching of providr undr which th consumr would kp at last som srvics with his formr providr until th contract has lapsd. This can only ngativly impact th ability of consumrs to switch, sinc h/sh would b limitd in his ndavours as far as this particular srvic or a packag including this srvic is concrnd. At th sam tim, vn if tying of products 14 (making th provision of an offr for a spcific product conditional on th purchasing of anothr) is forbiddn, consumrs could b in th situation whr thy ar strongly advisd to acquir anothr product if thy want to gt a spcific product undr spcific conditions. Consumrs should always hav th possibility to buy srvics in isolation. Thy should not b undr an obligation for instanc to opn a bank account as a prrquisit of buying othr srvics and vic vrsa. Failing this, consumrs would not b abl for xampl to switch thir bank account, if it is bundld with a mortgag crdit and th mortgag is xpnsiv to rpay arly. Bundling thrfor tnds to mak it mor costly to lav th currnt providr. Also, customrs oftn do not slct which products to includ into a bundl and nd up buying mor products than thy actually nd. Bundling of products/srvics is also likly to hav an impact on th lvl of multi-banking consumrs (multi-banking maning having bank accounts with mor than on bank), 15 and on th xtnt to which multi-banking would contribut to consumrs mobility. Multi-banking can in no way b considrd a 14 According to th Intrim Rport II: Currnt Accounts and Rlatd Srvics by DG Comptition, tying occurs whn two or mor products ar sold togthr in a packag, and at last on of thos products is not sold sparatly. Tying, unlik bundling, involvs corcing customrs to tak on additional - and prhaps unncssary - products. Bundling mans slling two or mor products togthr in a packag. Ths products may only b availabl as a bundl (pur bundling), or availabl sparatly but offrd at a discount rlativ to thir individual prics (mixd bundling). 15 Multibanking is mor likly whn banks do not charg high maintnanc fs for bank accounts. Consumatori, DirittiMrcato Diritti Mrcato Argomnti 79

9 substitut for switching, or vidnc of a comptitiv markt. In fact, consumrs may b forcd into multi-banking in th cas of bundld products and high fs for trminating or transfrring a contract of a spcific product in th packag. Whilst th optimal solution for thm would b to switch providr ntirly or at last for th product considrd, thy might rfrain from doing so during th liftim of th contract if th costs of trminating/transfrring th contract ar highr than th potntial bnfits thy would gt from switching. Th forcd immobility of consumrs has a dtrimntal impact on th lvl of comptition on th markt as wll as on th lvl of ntry of nw comptitors. Information asymmtris, th similarity of charging structurs, stability of dmand as wll as limitd markt powr of consumrs (atomisd dmand) might lad to a risk of tacit collusion btwn oprators. Th multiplication of banking fs and th apparnt paralllism of prics in som Mmbr Stats ar lmnts to considr in that rspct. Paradoxaxically, xclusionary practics from dominant firms (pric dcrass, advantagous tarification of packags, fidlity rwards) might sm to bnfit consumrs in th short run. Howvr, if ths offrs ar part and parcl of a stratgy aiming at pric comptitors out of th markt, consumrs will b disadvantags in th mdium to long run. Thrfor, this stratgy has to b distinguishd from th fficint and lgitimat comptitiv bhaviour which is to th prmannt bnfit of consumrs. Th low churn rats, at around 9% yarly on avrag in th UE 16 impact nga- tivly th lvl of ntry on th markt. In fact, sinc fw consumrs switch providr as a rsult of lack of transparncy and high opportunity costs rndr dmand rlativly inlastic to prics: consumrs switch lss than th pric movmnts on th markt would normally imply. This inlasticity can rsult in prohibitiv costs of acquiring clints for nw ntrants, whilst thy ar facd with th ncssity to mak conomis of scal to rndr profitabl thir ntry on th markt. As a consqunc, ntry can b limitd, all th mor sinc th sunk costs of attmpting to attract customrs and/or to build on s rputation and crdibility cannot b ignord. Bttr rgulation and rgulatory fficincy Th problms highlightd abov impact th mannr in which th intgration of rtail financial srvics must b nvisagd from a rgulatory prspctiv. Th bttr rgulation approach including impact assssmnts and an xtnsiv consultation, is put forward as a litmotiv at Europan lvl. Evn if xcssiv rgulation and buraucracy must naturally b avoidd, on can wondr why a simpl/simplr lgislation should b on th agnda in Intrim Rport II Currnt Accounts and rlatd srvics, Sctor Inquiry undr Articl 17 Rgulation, 1/2003 on rtail banking, 17th July Consumatori, DirittiMrcato Diritti Mrcato Argomnti

10 a sctor charactrisd with sophisticatd products, complicatd offrs/tid products and information asymmtris as wll as not so simpl a lgislation at national lvl. Th tst for a lgislation to b proposd should in no cas b its purportd simplicity, but its capacity to solv th problms that consumrs and providrs could ncountr on th markt. Obviously, ruls nd to b proportionat and a good transposition of Europan ruls must b nsurd. Howvr, it is difficult to imagin that non complx ruls could b fficint in th fild of rtail financial srvics. Th dcision making procss ncssitats mor transparncy and consultation. Th ffctiv implication and rprsntation of consumrs organisations ar ssntial. Thr is a nd for Europan institutions to b informd about what constituts progrsss in rspct of intgration from th point of viw of consumrs, th mannr in which th rgulatory initiativs influnc consumrs and th aras in which dcision makrs should concntrat thir fforts. Similarly, th intgration of consumr protction policy into othr community policis, as dfind in Articl 153 of th Traty must b implmntd, and th lgislativ procss must rflct this intgration. Consquntly, th us of Consumrs Impact Assssmnts, to assss th costbnfits of th proposd lgislation, and to tak into account th impact on consumrs wlfar, should b on th agnda. Part of this discussion on bttr rgulation is th incrasing tndncy to rly on th so-calld Lamfalussy Committs, mad up of mmbr stat rprsntativs, to adapt and complt th framwork lgislation in th ara of financial srvics, supposdly to rduc th tim ncssary to adapt financial rgulation to nw markt dvlopmnts. Whilst thr is a nd for bttr consultation mchanisms and gratr transparncy, and to improv th involvmnt of stakholdrs and of consumr organisations in particular, in fact, lawmaking might not b fastr and mor fficint sinc th consultation on implmnting masurs will impact on th tim whn th final packag of masurs is agrd upon. Th procss as it stands allows a dlgatd authority to issu subsidiary lgislation: this is law-making, which should not b don bhind closd doors. It could also call into qustion national discrtionary powrs as far as consumr protction provisions ar concrnd. Th political momntum nds to b considrd whn assssing spd and fficincy. For instanc, th Rgulation on cross bordr paymnts in uros 17 was adoptd in a short tim-span du to th political momntum (th changovr to th Euro) - and this was outsid th Lamfalussy procss. Also, timly implmntation/transposition of Community dirctivs (including implmnting masurs in th form of dirctivs) into national laws and nforcmnt ar ky issus, and actual implmntation rmains an unknown factor. Corporat govrnanc could also play a complimntary rol in th fild of rtail financial srvics. Bsids companis, accountants and auditors and othr markt 17 Rgulation 2560/2001 of 19th Dcmbr 2001 propo- sd in July Consumatori, DirittiMrcato Diritti Mrcato Argomnti 81

11 participants having to apply th highst thical standards in thir work, consumrs must b put at th hart of corporat govrnanc. Corporat govrnanc would covr information to consumrs, product dsign, contractual trms and conditions, fair pnalty chargs, to try to promot consumr confidnc in financial srvics. Th linking th rmunration of financial firms dirctors to indicators factoring in how wll consumrs ar tratd, fair and rsponsibl practics could b considrd, as wll as ruls to prvnt rtail financial firms from using rmunration stratgis which conflict with th duty to trat customrs fairly. Th political agnda: priority to intgration? 82 Consumrs protction as such should not b considrd as an obstacl to th intgration of th intrnal markt in rtail financial srvics. On th contrary, a high lvl of consumrs protction is ncssary to stimulat consumrs confidnc (in all th EU rtail financial srvic providrs). This is th only way to rsolv (partly) th problm of asymmtric rlationship btwn consumrs and financial srvics providrs. Harmonisation must not lad to a dtrioration of th xisting lvl of consumrs protction. Mutual rcognition and maximum harmonisation ar no viabl option in that mattr. Mutual rcognition can only b nvisagd whn thr has bn a natural procss of adaptation of rtail products and srvics to local dmand. Consumrs alrady fac difficultis in comparing financial srvics, vn within on singl Mmbr Stat. It dos not sm ralistic to xpct consumrs to b abl to mak an nlightnd choic in contractual law, as thy would hav to undrstand th diffrnt national lgislations to b in a position to bnfit from th potntial advantags and th largr choic providd by fr movmnt. Maximum harmonisation would rinforc uncrtaintis and ambiguitis, sinc consumrs could not count on thir national ruls dvlopd to dal with problms rlvant for thir markts. Ths ar not simpl obstacls to intgration, which would hav to b liminatd. Mmbr Stats should b abl to kp/introduc additional consumr protction ruls going byond th (Europan) harmonisd lvl. Maximum harmonisation could by its vry natur undrmin consumrs confidnc. Th choic of th rgulatory instrumnt most appropriat must b don in a fair and balancd mannr and should not b biasd towards slf-rgulation, in particular sinc it is not ncssarily quickr or mor fficint in trms of adoption and implmntation, nor mor flxibl than binding rgulation. Lastly, convrgnc in rspct of suprvision must not call into qustion th capacity for national authoritis to intrvn if a providr dos not abid by th ruls or prjudics consumr intrsts. This would includ th possibility to ban a providr or to withdraw its licnc if ncssary. Consumatori, DirittiMrcato Diritti Mrcato Argomnti

12 A practical cas: th Singl Euro Paymnts Ara Amongst th far raching initiativs considrd at Europan lvl, th Singl Euro Paymnts Ara projct is at th sam tim th most advancd and th most likly to dirctly impact consumrs in thir daily lif. In thory, SEPA is a mostly industry-ld initiativ 18 to allow citizns, companis and othr conomic actors to mak and rciv paymnts in uros, within Europ, whthr btwn or within national boundaris undr th sam basic conditions, rights and obligations, rgardlss of thir location. 19 Rplacing national products by Euro-wid products basd on common standards for both national and cross bordr paymnts gos byond Rgulation 2560/2001 on cross bordr paymnts in uros, which was basd on th fundamntal principl of quivalnc of chargs for national and cross bordr paymnts in uros. It covrd card paymnts, cash withdrawals at ATMS S and crdit transfrs, whilst undr SEPA standards will b dfind for cards, crdit transfrs and dirct dbits. SEPA will concrn paymnts in uro within th EEA ara and Switzrland. In fact, th SEPA standards will impact dirctly th faturs of th products availabl to consumrs at national lvl, as wll as thir pricing, and potntially banking srvics in gnral. How SEPA products would compar with currnt national products in trms of pric, quality and adaptation to consumrs nds is likly to vary from on Mmbr Stat to anothr and from on bank to anothr. Bsids, uncrtaintis rmain as rgards th cor faturs of products, byond which providrs will compt. For instanc, vn if th Paymnt Srvics Dirctiv clarifis that from 2012, th xcution tim for crdit transfrs will b on day within th Singl Markt. Howvr, th SEPA standard for crdit transfrs rfrs to a common maximum 3-day tim cycl. In som Mmbr Stats, dpnding on th dat of implmntation of th SEPA crdit transfr standard, sam day xcution tim (which is th rul) might b calld into qustion by SEPA, unlss thr is good markt bhaviour from oprators. Owing to th limitd consumrs mobility in th sctor, this raiss som doubts at th vry last. Thrfor, thr could b a forcd transition towards lss fficint SEPA products than th ons currntly on offr at national lvl. Evn if th pricing of SEPA products is not normally on th agnda of th industry discussions, for far of brach of antitrust ruls, SEPA products could also nd up bing mor xpnsiv for consumrs than currnt national paymnt products. Th transition from national products to SEPA products is unlikly to b achivd bfor 2012 at th arlist. Howvr, som banks hav alrady 18 Th Europan Commission and th Europan Cntral Bank working with th Eurosystm hav bn suppor- ting th work of th Europan Paymnts Council (EPC( EPC), which brings togthr th Europan paymnts industry. 19 Making SEPA a Rality - Implmnting th Singl uro Paymnts Ara, Europan Paymnts Council, 16 April Consumatori, DirittiMrcato Diritti Mrcato Argomnti 83

13 anticipatd this mov, rsulting in nw packags for consumrs, in Blgium, Slovnia and th Nthrlands. Th Eurosystm itslf has xprssd concrns 20 that th implmntation of a SEPA for cards may lad to incras in card fs and could b dtrimntal to consumrs and mrchants, spcially owing to th fact that in Europ national card schms ar gnrally vry fficint and rlativly inxpnsiv. Th rstriction of choic can also rsult in highr (rlativ) prics for consumrs. For instanc, if consumrs only ndd a (chapr) paymnt card for purly national paymnts, thy might b forcd to opt for (mor xpnsiv) urowid paymnt card, offring facilitis thy do not nd at a highr pric. Som of th bnfits to consumrs put forward by th EPC ar lusiv at bst. For instanc, consumrs might not b in a position to only possss on bank account to mak paymnts across th urozon vn if thy so choos. Consumrs might still b facd with substantial fs for withdrawing cash at an ATM outsid th ntwork of th bank of thir country of origin, at national and cross bordr lvl, vn whn considring th implmntation of Rgulation (EC( EC) ) No 2560/2001 on cross bordr paymnts in uro, 21 which provids for quivalnc of chargs for national and cross-bordr paymnts. This is compoundd by th uncrtaintis linkd to th intrprtation and implmntation of th Paymnt Srvics Dirctiv (to b formally adoptd in Sptmbr 2007) for instanc, as rgards th burdn of proof and liability whn paymnt mans hav bn lost, stoln or misappropriatd. Articl of th txt dos not mak a distinction btwn loss/thft and misappropriation of paymnt instrumnts, whilst consumrs ar gnrally not awar that thir paymnt instrumnt has bn misappropriatd bfor som tim has lapsd, and th ability of consumrs to prvnt misappropriation is limitd. To rqust a consumr to nsur for instanc that his crdit card dtails ar not accssibl to a hackr whn paying onlin is quit simply impossibl. Whilst it is possibl for Mmbr Stats to rduc consumrs liability, taking into account spcially th natur of th prsonalisd scurity faturs of th paymnt instrumnt and th circumstancs undr which it was lost, stoln or misappropriatd, th xtnt to which this margin of manouvr will b usd is still unknown quantity Th Eurosystm s viw of a SEPA for cards, ECB, No- vmbr 2006, availabl at othr/urosystmsviwspacardsn.pdf 21 OJ L 344 of , pp Articl 50, Payr s liability for unauthorisd us of paymnt instrumnt 1. By drogation from Articl 49 th payr shall bar th loss rlating to any unauthorisd paymnt transactions, up to a maximum of uro 150, rsulting from th us of a lost or stoln paymnt instrumnt or, if th payr has faild to kp th prsonalisd scurity faturs saf, from misappropriation of a paymnt instrumnt. 2. Th payr shall bar all th losss on unauthorisd transactions if h incurrd thm by acting fraudulntly or by failing to fulfil on or mor of his obligations undr Articl 46 with intnt or gross nglignc. In such cass, th maximum amount rfrrd to in paragraph 1 shall not apply. 2a. In cass whr th payr has not actd fraudulntly or with intnt faild to fulfil his obligations undr Articl 46, Mmbr Stats may rduc th liability rfrrd to in paragraphs 1 and 2, taking into account spcially th natur of th prsonalisd scurity faturs of th paymnt instrumnt and th circumstancs undr which it was lost, stoln or misappropriatd. 3. Th payr shall not bar any financial consquncs rsulting from us of th lost, stoln or misappropriatd paymnt instrumnt aftr th notification in accordanc with Articl 46(1)(b), xcpt whr h has actd fraudulntly. 4. If th paymnt srvic providr dos not provid appropriat mans for th notification at all tims of a lost, stoln or misappropriatd paymnt instrumnt, as rquird undr Articl 47(c), th payr shall not b liabl for th financial consquncs rsulting from us of that paymnt instrumnt, xcpt whr h has actd fraudulntly. Consumatori, DirittiMrcato Diritti Mrcato Argomnti

14 Conclusions It is important to implmnt comptition policy in an activ mannr in th fild of rtail financial srvics but thr is also a nd for binding masurs to dal with th captivity of consumrs and th bundling of products. In particular, arly rpaymnt fs and othr contractual trms tying in consumrs to providrs hav to b dalt with. Th harmonisation of intrfacs (structurd and normalisd prsntation of products, for xampl) should also b on th agnda, to allow for bttr information, transparncy and comparability of products. A highr lvl of financial ducation or th improvmnt of financial skills could lad to important bnfits in th long run, and allow for instanc to focus on th risk lmnts of th diffrnt products. Nvrthlss, allowing to th fact that most consumrs liv a vry activ lif and thir ability to follow a financial srvics training is ncssarily vry variabl, this is crtainly not panaca. For consumrs to manag thir financial products in a mor fficint mannr, it is thrfor important that thy rciv quality, profssional and indpndnt advic, indicating thm th product(s)/srvic(s) bst adaptd to thir nds and to thir financial situation (.g.: rimbursing capacity, prsonal mploymnt and family situation). Th nd for such advic will only incras with cross bordr provision of srvics, xtnsion of choic and highr involvmnt of financial intrmdiaris. Accss to rdrss is also indispnsabl and consumrs must b in a position to introduc a complaint with th local authoritis locals of thir country of rsidnc, without having to go to th authoritis of th Mmbr Stat th company originats from. Finally, without a bank account, many financial srvics rmain out or rach, and vn finding a job can b difficult du to th administrativ chargs in handling cash paymnt of th salary. Fw consumrs in th nw Mmbr Stats hav accss to a bank account. In fact, lss than 40% of thm hav a bank account in Poland, Lituania or Latvia. 23 This raiss th issu of univrsal srvic obligations in th ara of financial srvics. 23 Candidat countris Eurobaromtr May Consumatori, DirittiMrcato Diritti Mrcato Argomnti 85