Banks must inform customers of the total cost of the checking account
Many banks have recently increased their fees. How high the costs for the current account are, however, can hardly be seen at a glance. That should change now.
WWhat does my current account cost including all fees? From November onwards, credit institutions must inform their customers about the total costs once a year. This also includes, for example, the interest on the overdraft facility or possible fees for paper transfers. Until now, consumers had to laboriously collect the information on the bank statement.
Consumer advocate Dorothea Mohn praises the annual information as an “improvement over the current state”. “It is an important tool to sensitize bank customers to the costs and to increase the willingness to switch accounts,” said the head of the financial market team of the Federation of German Consumer Organizations (vzbv).
Cost comparisons are still missing
In order to make it easier for consumers to compare checking account fees, the credit houses must also create a cost overview before concluding the contract to open an account. The institutes must adhere to certain terms that have been defined by the financial supervisory authority Bafin. “The basic idea is good, we have to wait and see how helpful the information is in practice,” said Mohn. The regulations came into effect on October 31st.
It is regrettable that the planned websites with a free and objective cost comparison of the various account models do not yet exist, Mohn said. “Without this tool, it will be more difficult for consumers to make a comparison. We hope that the websites will come soon. “
The problem: So far there is no body that checks and certifies the portals. Testing organizations have not yet submitted any corresponding applications to the German Accreditation Service. The Federal Government is working intensively to increase awareness of the procedure, said the Federal Ministry of Finance.
Many credit institutions are increasing their fees in times of low interest rates. For a long time, the finance houses earned well from collecting more interest on loans than they paid savings customers. But the difference shrinks in times of low interest rates. While banks and some savings banks used to use free accounts specifically to attract customers, higher costs and expensive branches are forcing financial institutions to rethink.
According to Deutsche Bank board member Frank Strauss, the German market is normalizing, “everywhere banks – including direct banks – are introducing fees for checking accounts”. It is “perfectly right” to ask for money for services in the banking business, said the private customer board member and long-time Postbank boss recently to the “Frankfurter Allgemeine Sonntagszeitung”. “You don’t even go to the hairdresser and say: I’m not paying anything.”
