DOCSLIB.ORG

Study on Switching of Financial Services and Products

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Study on Switching of Financial Services and Products Study on switching of financial services and products Final report November 2019 Authors: Written by Oskar Andruszkiewicz, Facundo Herrera, Juliette Mathis, Ana Cordon, Maria Zhitkov and Rebecca Aylott (all ICF), Charu Wilkinson (ICF Associate), Simona Frazzani, Martina Piantoni and Mattia Pallinini (all Grimaldi), Sergio Nasarre-Aznar, Rym Ayadi and Marcin Kawinski (Individual Study Experts). EUROPEAN COMMISSION Directorate-General for Financial Stability, Financial Services and Capital Markets Directorate B - Horizontal policies Unit B3 – Retail financial services Contact: [email protected] European Commission B-1049 Brussels EUROPEAN COMMISSION Study on switching of financial services and products Final report Directorate-General for Financial Stability, Financial Services and Capital Markets Union (FISMA) November 2019 EV-03-19-683-EN-N EUROPE DIRECT is a service to help you find answers to your questions about the European Union Freephone number (*): 00 800 6 7 8 9 10 11 (*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you) LEGAL NOTICE This document has been prepared for the European Commission however it reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. More information on the European Union is available on the Internet (http://www.europa.eu). Luxembourg: Publications Office of the European Union, 2019 ISBN 978-92-76-10991-4 doi:10.2874/090150 © European Union, 2019 Reproduction is authorised provided the source is acknowledged. Final Report: Study on switching of financial services and products Table of Contents List of abbreviations ............................................................................................ i Abstract ........................................................................................................... iii Résumé ............................................................................................................ iii Executive Summary ........................................................................................... v Note de synthèse .............................................................................................. xii 1 Introduction ................................................................................................ 1 1.1 This Report ........................................................................................... 1 1.2 Purpose and scope of the study ............................................................... 1 1.3 Methodology ......................................................................................... 2 1.4 Structure of this report ........................................................................... 2 2 Background of the study ............................................................................... 2 3 Methodological approach ..............................................................................10 3.1 Study design ........................................................................................10 3.2 Methods and data sources .....................................................................12 3.3 Limitations of the study .........................................................................19 4 Task 1: Assessment of the savings forgone by consumers as a result of not switching to more advantageous products ...........................................................23 4.1 Task Overview ......................................................................................23 4.2 Residential mortgages – findings ............................................................29 4.3 Payment accounts – findings ..................................................................34 5 Task 2: Mapping of legal and commercial barriers to switching .........................42 5.1 Task overview ......................................................................................43 5.2 Legal barriers to switching .....................................................................43 5.3 Commercial barriers to switching ............................................................99 6 Task 3: Existing and prospective measures facilitating switching ..................... 116 6.1 Task overview .................................................................................... 116 6.2 Analysis of specific measures ............................................................... 119 7 Conclusions .............................................................................................. 154 7.1 Task 1 ............................................................................................... 154 7.2 Task 2 ............................................................................................... 155 7.3 Task 3 ............................................................................................... 158 8 Recommendations ..................................................................................... 159 Final Report: Study on switching of financial services and products List of abbreviations ACM The Netherlands Authority for Consumers and Markets AER Annual Equivalent Rate AFM Dutch Financial Markets Conduct Authority AISP Account Information Service Providers ANP Account Number Portability APRC Annual Percentage Rate of Charge ARM Adjustable Rate Mortgages ATM Automated Teller Machine BaFin German Federal Financial Supervisory Authority BBVA Banco Bilbao Vizcaya Argentaria BIC Business Identifier Codes CASS Current Account Switching Services CEE Central and Eastern Europe CEL Compte Epargne Logement CPI Credit Protection Insurances CZK Czech Koruna DDK Danish Krona DG FISMA Directorate General Financial Stability, Financial Services and Capital Markets Union DG JUST Directorate General Justice and Consumer Affairs EACB European Association of Co-operative Banks EBA European Banking Authorities EBA COREP European Banking Authorities Common Reporting EBF European Banking Federation ECB European Central Bank EEA European Economic Area EJS Electronic Journals Service EMF European Mortgage Federation ESIS European Standardised Information Sheet EU European Union EUR Euro EU-SILC European Union Statistics on Income and Living Conditions FCA Financial Conduct Authorities FIN-FSA Finnish Financial Supervisory Authority FRM Fixed Rate Mortgages FSUG Financial Services User Group 29th November, 2019 i Final Report: Study on switching of financial services and products HMRC Her Majesty’s Revenue and Customs HSBC Hongkong and Shanghai Banking Corporation GBP Great Britain Pound GDP Gross Domestic Product GS Goldman Sachs HRK Hrvatska Kuna IBAN International Bank Account Number IDD Insurance Distribution Directive IMLA International Municipal Lawyers Association JRC Join Research Centre KNF Polish Financial Supervision Authority LtV Loan to Value LIBOR London Inter-bank Offered Rate MCD Mortgage Credit Directive MS Member State VAT Value Added Tax PAD Payment Account Directive PEA Plan d’epargne en action PEL Plan épargne logement PISP Payment Initiation Service Provider PPI Payment Protection Insurance PSD2 Payment Service Directive 2 SEPA Single Euro Payments Area SVR Standard Variable Rate TFEU Treaty on the Functioning of the European Union TEU Treaty of European Union TPPP Third Party Payment Processor UK United Kingdom UOKIK Polish Office of Competition and Consumer Protection USD United States Dollar 29th November, 2019 ii Final Report: Study on switching of financial services and products Abstract The ability and willingness of consumers to switch products and services is central to well-functioning markets. Relatively ‘low’ rates of switching in the retail financial services and products sector has long been of concern to policy makers and consumer organisations. Although there is no optimal rate of switching, switching is believed to be inhibited in these markets due to the existence of related costs or barriers. This is an independent study on switching of financial services and products. More specifically, it assesses the savings forgone by consumers by not switching to more advantageous residential mortgages and payment accounts, provides a comprehensive overview of the legal and commercial barriers to switching in the case of five selected retail financial products, and provides a comprehensive overview of existing (and prospective) measures to increase switching rates across those five financial products. Study evidence was gathered through a mixed-methods approach, comprising both quantitative and qualitative research techniques. The study concludes that there is a considerable number of mortgage and payment account consumers who would benefit from switching, albeit to various degrees, depending on the country and product. At the same time, in some Member States, there is a not insignificant number of consumers who still do not manage to obtain a better deal, despite switching. While the study finds that there are no major legal and commercial barriers to switching of payment accounts, saving accounts, mortgage and home insurance products, switching of residential mortgages is typically more challenging given the conditions required for early repayment or refinancing of mortgages, the plethora of fees that may apply to switch a mortgage, or difficulties related to comparing the various mortgage offers by consumers, among others. The study finds that there is no single measure - whether a well-tailored
Load more

Recommended publications
  • Our 2015 Annual Review
    Sheffield Citizens Advice Annual Review 2014/15 Tackling poverty and campaigning for social justice Our year Welcome to the Sheffield Citizens Advice Annual Review for 2014/15. This has been our first full year of operation, during which we have made considerable progress towards realising the Our advice benefits of bringing Sheffield’s advice services together in services one organisation. helped We helped over 20,000 people in 2014/15. 19,833 We have introduced new services, including providing advice at foodbanks, and the new Pension Wise service which we provide people across South Yorkshire. with We have contributed to campaigns and social policy: > Our report about benefits sanctions led to a parliamentary debate 62,484 as part of the growing campaign for the sanctions regime to be issues changed; > Our general election briefing set out some important issues for candidates and the new Government; > Our investigation into personal independence payment highlighted unfair rules affecting terminally ill people, for which a change to the law is being sought. Our mental We have also helped to refresh Sheffield’s strategy for tackling health poverty and are contributing to the Fair City campaign. We are joining advocacy forces with Citizens Advice in England’s other major cities, to make the case for advice services and to work together on campaigns. service helped We have a great workforce, many of whom we have featured on the cover of this report. 827 We have made important changes to our paid workforce, so that we now have a single unified management and staff structure, with people common pay, terms and conditions.
    [Show full text]
  • Climate Change Accountability
    CLIMATE CHANGE ACCOUNTABILITY YOUNG FABIANS ENVIRONMENT NETWORK COP26 REPORT Revealing How to Improve Transparency, Assign Responsibility & Implement Science-Backed Solutions to Solve the Climate Crisis Foreword by Matthew Pennycook MP Edited by Jack Parker, Cecilia Jastrzembska & Laura Cunliffe-Hall © 2020 Young Fabians Climate Change Accountability First published September 2020. Launched at Labour Connected 2020. All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior writ- ten permission of the publisher or editor, except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law, where the source of information is acknowledged as this publication. Please send a copy of the document in which this publication is used or quoted to the publisher and editor. For permission requests, write to the publisher or editor, addressed “Attention: Permissions Coordinator”. Like all publications of the Fabian Society, this report represents not the collective views of the Society, nor nec- essarily the views of the editors nor the writers of the forewords, but only the views of the individual writers. The responsibility of the Society is limited to approving its publications as worthy of consideration within the Labour movement. Typeset and Cover Design: Robin Wilde: https://robinwilde.me. The editors would like to thank Labour Party Graphic Designers for putting them in touch with Robin. The moral rights of the author have been asserted. British Library Cataloguing in Publication data. A catalogue record for this book is available from the British Li- brary.
    [Show full text]
  • Our Aims and Principles the Principles of CAB Advice How CAB Advisers Can Help
    Our aims and principles The Citizens Advice service aims: • To provide the advice people need for the problems they face. • To improve the policies and practices that affect people’s lives. The service provides free, independent, confidential and impartial advice to everyone on their rights and responsibilities. It values diversity, promotes equality and challenges discrimination. The principles of CAB advice Independent – we will always act in the interests of our clients, without influence from any outside bodies. Impartial – we don’t judge our clients or make assumptions about them. Our service is open to everyone, and we treat everyone equally. Confidential – we won’t pass on anything a client tells us – or even the fact that they’ve visited us – without their permission. Free – no-one has to pay for any part of the service we provide. Top five CAB client problems in 2009/10 (England and Wales) • Debt (2,374,000) • Benefits and tax credits (2,074,000) • Employment (586,000) • Housing (468,000) • Relationships and family (333,000) How CAB advisers can help There are a number of different ways that CAB advisers can help people to resolve a problem. Advisers don’t tell clients what to do, but explain their options and the possible outcomes of different courses of action. Clients are encouraged to make their own decisions and act on their own behalf. We enable clients to manage their own problems by focusing on their needs as individuals. CAB advisers, most of whom are trained volunteers can: • interview clients face-to-face and by phone
    [Show full text]
  • Scottish Expert Panel for the Collaborative Economy Participation: Consumers, Providers, Business & Digital Skills
    Scottish Expert Panel for the Collaborative Economy briefing - Citizens Advice Scotland Scottish Expert Panel for the Collaborative Economy Participation: Consumers, Providers, Business & Digital Skills Written briefing from Citizens Advice Scotland Citizens Advice Scotland (CAS), our 61 member Citizen Advice Bureaux (CAB), the Citizen Advice consumer helpline, and the Extra Help Unit, form Scotland’s largest independent advice network. Advice provided by our service is free, independent, confidential, impartial and available to everyone. Our self- help website Advice for Scotland provides information on rights and helps people solve their problems. In 2015/16 the Citizens Advice network in Scotland helped over 310,000 clients in Scotland alone and dealt with over one million advice issues. With support from the network clients had financial gains of over £120 million and our Scottish self-help website Advice for Scotland received over 4 million unique page views. Introduction CAS welcomes the opportunity to provide evidence to the Scottish Expert Panel for the Collaborative Economy. The benefits to consumers and to the economy of the collaborative economy are potentially significant, although it is important that protections are in place to ensure that consumers, providers and workers do not suffer from any poor practice or policies. In this initial briefing, we provide high level evidence on the consumer experience of aspects of the collaborative economy as collated by citizens advice bureaux and the Citizens Advice Consumer Helpline. Due to the nature of advice provision, evidence from the CAB network predominantly focuses on problems that consumers experience in any sector. This briefing therefore focuses on consumer protection and the types of problems that people can experience in the collaborative economy – whether they are consumers, providers or workers.
    [Show full text]
  • Computer Applications in Social Work and Allied Professions
    Computer Applications in Social Work and Allied Professions VOLUME 3 NUMBER 4 AUTUMN 1987 Using Computers to Plan Services for People with a Mental Handicap David Columbi's Personal Computer Odyssey Computer System Development in Lothian Computers in the Dutch Social Services Obtaining Extra Staff Using ' Special Funding Measures PLUS Abstracts of over 130 papers which will feature during the HUSITA Convention CASW ISSN No. 0267 1980 1 Up-Front Advertising Address Planning for progress. CASW 3 A Micro-Menu for Macro Planning PO Box 52 Sheila Clark details the use of computers in planning services for people Stourbridge with a mental handicap in Hampshire. DY8 3NN United Kingdom 8 A Computer Odyssey David Columbi is wondering why everyone keeps telling him to get an TEL: 021 356 6911 (ext. 303/301). Amstrad. 11 Resourcing Computer Development Editorial Address Peter Ashe describes the Lothian Social Work Department approach to developing computer systems. Dept. of Social Work Studies, 15 Computers in Dutch Social Services The University of Southampton, Hein de Graaf considers the possible 'collision' when information S09 5NH. technology meets the social services. TEL: 0703 559122 ext. 3536/2576 20 Soft but not Squidgy Stuart Montgomery relates how Swathclyde Social Work Department Subscription Rates have obtained extra staff resources by using special funding measures. (This Volume) 24 CASW Reviews UK The usual mix of software, book and periodical reviews featuring a first Personal £8.00 per annum look at the new Aspect Relational Database
    [Show full text]
  • An Introduction to Volunteering with Citizens Advice Knowsley
    An Introduction to Volunteering with Citizens Advice Knowsley This booklet is divided into 5 sections: 1. Overview of the Citizens Advice service page 2 - 13 Introduction Aims and Principles Structure of the Citizen’s Advice Service Valuing difference and providing equal opportunities Campaigns and Research Campaigning 2. About Citizens Advice Knowsley page 14 - 18 Key facts Graphs detailing client problems, new clients, gateway approach 3. Training and development page 19 - 24 Support and supervision Minimum commitment and attendance requirements Resolving problems Attitudes and awareness 4. Volunteer roles page 25 - 30 Citizens Advice volunteering – the facts 5. Assessment days page 31 1 Overview of the Citizens Advice Service * The Citizens Advice service provides advice to any member of the public who needs help to solve a problem on any issue they’re facing. The Citizens Advice service has a network of around 300 member Citizens Advice offices and 23,000 volunteers, delivering advice services from over 2,600 outreach centers. We provide advice face-to-face, over the phone and through digital channels. We act as one service, with one vision, yet we are also rooted in each and every community across England and Wales. In 2016/17 our network saw 2.7 million people with 6.3 million issues. Our 2014 national research into the outcomes and impact of our advice demonstrated that at least two out of three clients who seek our help will have their problem partly or completely solved. From 2012, we have had responsibility for the Consumer Direct telephone service, now known as the Citizens Advice consumer service On 1 April 2015, Citizens Advice took over responsibility for the Witness Service from Victim Support.
    [Show full text]
  • Enquiry Into Advice Services in France, Germany, the Netherlands
    Lisa Webley & Sylvie Bacquet A REVIEW OF HOW OTHER COUNTRIES PROVIDE INFORMATION AND ADVICE TO THE VULNERABLE ON CONSUMER AND SOCIAL ISSUES REPORT TO THE DTI MAY 2006 SYLVIE BACQUET & LISA WEBLEY EMAIL: [email protected]; [email protected] UNIVERSITY OF WESTMINSTER SCHOOL OF LAW 4 LITTLE TITCHFIELD STREET LONDON W1W 7FW TEL: 020 7911 5000 FAX: 020 7911 5821 Electronic copy available at: http://ssrn.com/abstract=1337739 Sylvie Bacquet & Lisa Webley CONTENTS INTRODUCTION & METHOD ........................................................................................................... 3 FRANCE ...................................................................................................................................... 4 GERMANY.................................................................................................................................. 17 SWEDEN.................................................................................................................................... 28 THE NETHERLANDS ................................................................................................................... 40 COMPARISONS & CONCLUSIONS ................................................................................................ 50 BIBLIOGRAPHY .......................................................................................................................... 55 2 Electronic copy available at: http://ssrn.com/abstract=1337739 Sylvie Bacquet & Lisa Webley INTRODUCTION & METHOD As part of the Comprehensive
    [Show full text]
  • Reducing Expenditure
    1 Consumer Education Secondary ticketing resource ©2015 Citizens Advice 2 This workbook has been produced by the Citizens Advice Consumer Strategy team. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, Citizens Advice assumes no responsibility. The user of the information agrees that the information is subject to change without notice. To the extent permitted by law, Citizens Advice excludes all liability for any claim, loss, demands or damages of any kind whatsoever (whether such claims, loss, demands or damages were foreseeable, known or otherwise) arising out of or in connection with the drafting, accuracy and/or its interpretation, including without limitation, indirect or consequential loss or damage and whether arising in tort (including negligence), contract or otherwise. Copyright © 2015 Citizens Advice All rights reserved. Any reproduction of part or all of the contents in any form is prohibited except with the express written permission of Citizens Advice. Examples of newspaper articles and video clips sources have been referenced in the Appendix. Citizens Advice is an operating name of the National Association of Citizens Advice Bureaux, Charity registration number 279057, VAT number 726020276, Company Limited by Guarantee, Registered number 1436945 England. Registered office: Citizens Advice, 3rd Floor North, 200 Aldersgate Street, London, EC1A 4HD ©2015 Citizens Advice 3 Guidelines The Aim of this session is to introduce the changes the Consumer Rights Act brings to rules for secondary ticketing sites (and sales) and how consumers can make an informed purchase. Objectives are: To raise awareness of what information the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 and the Consumer Rights Act require consumers to be given about secondary ticketing sales; To make informed choices.
    [Show full text]
  • Flipping the Narrative
    FLIPPING THE NARRATIVE Essays on transformation from the sector’s boldest voices Featuring Alex Fox, Anni Rowland-Campbell, Charlie Leadbeater, Clare Thomas, Danny Kruger, Darren Murinas, Debbie Pippard, Javed Khan, Jill Halford & Neil Sherlock, Kevin Carey, Maff Potts & Charlie Howard, Mark Atkinson, Neil McInroy, Pat McArdle, Peter Kellner, Sue Bent. NPC – Transforming the charity sector Flipping the narrative | Contents CONTENTS Foreword from Patrick Murray, NPC ................................................................................................................... 3 Setting the scene: Why we need boldness and bravery in these times of change Charles Leadbeater, independent writer, advisor and speaker ...................................................................... 4 Strategy and governance ................................................................................................................................. 7 How we’re building a greater scope for greater impact Mark Atkinson, CEO, Scope ........................................................................................................................... 8 Our work must be person-led, not systems-led Pat McArdle, CEO, Mayday Trust ................................................................................................................ 12 We need brave, in-your-face, hard-headed governance Kevin Carey, Chair, RNIB ............................................................................................................................. 16 Relationship
    [Show full text]
  • Class of 1967 50Th Reunion Yearbook
    CLASS OF 1967 50TH REUNION Dear Classmates, Whether it seems like a very long time ago, like only yesterday, or a little of both, it really has been fifty years since our commencement. And now we are getting ready for another celebration at Brandeis. The Reunion Committee has worked diligently to create a memorable weekend. We will reconnect with friends, classmates, and even some apparent strangers to share memories and marvel at how we and the University have changed and not changed over the last fifty years. There will be meals, discussions, entertainment, gatherings, and schmoozing. A special keepsake of the Reunion is our class yearbook. Thanks to all who sent in submissions. We are especially grateful to Ron Mayer for his efforts in spearheading this project. Enjoy it! The yearbook contains the stories, memories, and thoughts of many of our classmates. Each is unique. Some are funny, some are sad, some are informative, and some are not. Yet together they tell a story and no matter how much we may care to deny it, it is a story that played an important part in our lives. We are looking forward to seeing you in June. Anne Reilly Hort Howard Scher Robert Hort 50th Reunion Co-Chairs !"#$%&'()*$'+&"(',-!! .$!/012!3'!4'5!67//8!! ./!<=/><?@>18</) "#$%"%&%"'#()!(*+(#,-.-#%) 9()%:(.2!.($$(,:&$-%%$!80161;7//8) &/!A-&#"'#B4A(#*-"$>-*&1) Special Thanks On behalf of the Institutional Advancement Division, we would like to thank the members of the Class of 1967 Reunion Committee. Anne Reilly Hort, Co-chair Robert U. Hort, Co-chair Howard D. Scher, Co-chair Diane Lowe Bernbaum Lawrence W.
    [Show full text]
  • Impact Report 2019/20 2 We Are Citizens Advice
    Impact report 2019/20 2 We are Citizens Advice We are Citizens Advice We can all face problems that seem complicated or intimidating. At Citizens Advice, we believe no one should have to face these problems without good quality, independent advice. The Citizens Advice service is made up of the No one else sees so many people with so national charity, and our network of over 270 many different kinds of problems, and that independent local Citizens Advice charities in gives us a unique insight into the challenges England and Wales. people are facing today. With the right evidence, we can show big organisations – We offer confidential advice online, over the from companies right up to the government – phone and in person, for free. As well as our how they can make things better for people. core advice, we also deliver the consumer service, our Witness Service, Help to Claim, That’s why we’re here: to give people the Pension Wise and debt advice funded by the knowledge and the confidence they need to Money and Pensions Service. We’re also the find their way forward – whoever they are, and consumer champion for the energy market whatever their problem. and the statutory consumer watchdog for the postal service. When we say we’re for everyone, we mean it. People rely on us because we’re independent and totally impartial. 3 Our impact in 2019/20 Our impact in 2019/20 This year we’ve helped more people access the support they need. We’ve expanded the ways people can access our service and seen increased demand for advice through phone and webchat.
    [Show full text]
  • Normal MPO B&W
    THE CZECH REPUBLIC 1 Consumer Policy Institutions ............................................................................................................. 2 1.1 Ministries Responsible for Consumer Policy ...................................................................................... 2 1.2 Public Agencies................................................................................................................................... 5 1.3 National Consumer Organisations ..................................................................................................... 7 1.4 National Councils/Assemblies Of Consumer Organisations And Other Stakeholders ..................... 11 1.5 Consumer Media .............................................................................................................................. 11 1.6 Redress Bodies: Courts and ADRs .................................................................................................... 11 1.7 European Consumer Centre ............................................................................................................. 13 1.8 Self or Co-regulation ........................................................................................................................ 13 2 Consumer Policies ............................................................................................................................ 15 2.1 Consumer Protection Legislation ....................................................................................................
    [Show full text]