EU executive, banks agree on account switch code

                                
 By Huw Jones
                                
 BRUSSELS, Dec 1 (Reuters) - The European Commission endorsed
a set of principles on Monday that banks will introduce in
November 2009 to make it easier for customers to switch accounts
and find a cheaper service.
                                
 The European Union executive had threatened to regulate
unless banks come up with a code that was effective across the
27 member states.
                                
 "I am pleased that the European banking industry took up the
challenge of self-regulating on this important initiative for
European citizens," EU Internal Market Commissioner Charlie
McCreevy said in a statement.
                                
 "I believe that, once implemented by all European banks, the
principles will increase mobility and stimulate competition,"
McCreevy said.
                                
 EU Consumer Commissioner Meglena Kuneva said 56 percent of
European consumers report that they paid a lower price, for
services such as direct debits and standing orders, when they
switched banks.
                                
 The principles were drawn up by the European Banking
Industry Committee (EBIC), made up of banking associations, and
relate to switching accounts only within an EU state.
                                
 "The European banking industry is confident that the
EBIC common principles will substantially benefit Europe's
consumers," EBIC Chairman Giuseppe Zadra said.
                                
 Consumer groups said they will monitor the code closely.
                                
 "This is a first step. Banks have to prove their code will
work and make it really easy for consumers to switch banks,"
said Monique Goyens, director general of EU consumer rights
lobby BEUC.
                                
 The principles lay down several steps:
                                
 -- if a consumer wishes to change bank, the new bank will
act as the primary contact point and offer its assistance
throughout the switching process;
                                
 -- the new bank will deal with the old bank, ensuring that
the transfer of the consumer's recurrent payments, such as
direct debits and standing orders, is done smoothly and rapidly;
                                
 -- the new bank will also either help the consumer to inform
the relevant third parties, such as utilities providers, about
the new bank account details or do that itself;
                                
 -- the new bank will assist the consumer in closing the old
account and transferring the remaining balance to the new
account;
                                
 -- the old bank will generally not charge the consumer for
providing standard information about the consumer's recurrent
payments. The Commission expects the switch to be generally free
of charge;
                                
 -- the old bank has to provide all the available information
about the consumer's recurrent payments within seven banking
days. The new bank has to set up recurrent payments on the new
account within seven days of receiving these details.
 (Reporting by Huw Jones; editing by Simon Jessop)