Wishlist: Financial Retail Services

Based on the questions and complaints received by ECC-Net in recent years, we have identified several key issues that require improvement. As consumers increasingly seek to shop cross-border, travel across different EU countries, and access financial services, addressing these issues is essential.

Direct debits

• Companies limiting direct debits to national bank accounts and ignoring article 9 of the SEPA regulation
  Despite Article 9 of the SEPA Regulation being in force, which allows consumers with a second residence in another EU country to have direct debits taken from any SEPA account (such as one from their home country), many consumers are facing difficulties. In practice, traders, including insurance companies, often refuse to execute direct debits from bank accounts in another EU member state. This situation is forcing consumers to open new bank accounts in the country of their second residence.
• Lack of protection against fraudulent direct debits
  Additionally, there is inadequate protection against fraudulent direct debits in some countries. Under the SEPA Regulation, traders can initiate direct debits from a consumer's account using only the IBAN number. Unfortunately, no comprehensive European solution has been established to address the fraudulent use of direct debits. For further details on this issue in France, please refer to the following link: French Parliamentary Inquiry.

Fraudulent financial investment services

• Lack of protection against fraudulent financial services websites
  We frequently receive complaints about fraudulent online financial services. These scams often involve companies offering investments in cryptocurrencies or precious metals, such as bitcoins and gold. Consumers are persuaded to invest, only for these companies to vanish with their money.

Chargeback

• Lack of harmonized chargeback system across EU Member States
  For consumers dealing with problematic online traders, chargeback is often the only means to recover their funds. Paying by credit card is therefore strongly recommended for online transactions. However, the chargeback system is not uniformly implemented across all EU member states. It is essential to improve this system so that consumers have a legal right to chargeback in every EU country, similar to the provisions in some countries. For more information, refer to the ECC Norway report for ECC-Net: Chargeback in the EU/EEA: A Solution to Recover Your Money When a Trader Does Not Respond.

Unclear bank statements

• Need for more detailed trader information on bank statements
  Given the presence of unscrupulous traders who may access consumers' bank accounts through direct debits or subscription traps, it is crucial for consumers to have clear and detailed bank statements. In some EU member states, the name of the trader on bank statements does not always match the name of the account holder, creating potential confusion. To address this issue, we believe new rules should be established to ensure that bank statements provide more comprehensive information about traders.

Opening or closing bank accounts

• Opening and closing bank accounts and updating information: current challenges
  The processes for opening or closing bank accounts and updating related information remain overly complicated and act as barriers to the internal market.
  
  Consumers who wish to open a bank account in another country often find it challenging to do so remotely, as many countries still require in-person visits to complete the process. Additionally, there have been cases where consumers with accounts in foreign countries were asked to update their information but could only do so by visiting a bank branch in person, which is not feasible for everyone.
  
  Moreover, the procedures and documentation required for accessing an account following life events such as succession or divorce are not harmonized across the EU, or even within the same country or bank. This lack of standardization adds to the complexity and frustration for consumers.

ATM withdrawal charges

• Additional ATM withdrawal charges imposed by some Member States
  Although EU legislation mandates that ATM withdrawal charges should be the same in the cardholder's home country as in other EU countries, some member states still impose additional fees. Specifically, consumers in Spain and Italy have reported charges for ATM withdrawals, while in countries like Belgium, such withdrawals are often free of charge.
  
  Spain and Italy argue that these fees are not discriminatory since they apply to all users of their ATMs. However, this practice limits the accessibility and use of financial services within the EU. Consumers should not be penalized for accessing their own money, and such fees undermine the principle of equal financial service access across the Union.

Diversity of bankcards

• Excessive diversity of payment cards across Europe
  The lack of uniformity in payment cards within the EU creates issues for consumers when paying abroad. For example, some countries issue "Visa cards" that function as debit cards rather than credit cards, yet these are not always accepted as debit cards in other member states. Additionally, not all credit cards are equipped with embedded chips, which can prevent their use for purposes like securing deposits at car rental agencies, despite being genuine credit cards. This diversity complicates transactions and limits the convenience of using payment cards across different EU countries.

New bank apps

• Emergence of new financial players
  The market for financial services is expanding with the arrival of new players, such as innovative banking apps. While we currently do not have complaints about these applications, it is possible that consumers are unaware of their right to seek assistance from the ECC-Net if issues arise. Given that these apps require access to consumers' bank accounts, it is crucial to closely monitor their data protection practices and ensure they provide clear information about the level of security they offer.