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Brussels, 1 December 2008

Banking: Commission welcomes new industry rules on account switching

The European Commission has welcomed the European Banking Industry Committee's (EBIC) adoption of a set of 'Common Principles for Bank Account Switching', which will make it easier for consumers to switch their current account from one bank to another within their own Member State. In the Commission's view, this represents a tangible benefit for consumers and should help to boost competition on the European retail banking market. The new rules have been developed in response to an invitation from the Commission announced in the 'Single Market for 21st Century Europe' package (IP/07/1728).

Internal Market and Services Commissioner McCreevy said: "I am pleased that the European banking industry took up the challenge of self-regulating on this important initiative for European citizens. I believe that, once implemented by all European banks, the Principles will increase mobility and stimulate competition. The adoption of the Common Principles is a crucial step showing European banks' commitment to competition, even under the current difficult circumstances. However, the banks' job is not over yet. Now they will have to work hard on proper implementation and application of these Principles in each Member State".

EU Consumer Commissioner Meglena Kuneva said: "The objective is very clear, we want to get rid of the extra costs and paperwork that are holding consumers back from switching easily to get the best deal from banks on the high street. We know that the current account market has significant untapped potential for cost savings. A staggering 56 % of European consumers report that they got a lower price when they switched. These principles mark an important first step towards making free bank switching a reality for consumers. But the proof of the pudding will be in the eating: together with consumer bodies, we will be watching the implementation of the code carefully to see whether it produces concrete results."

According to the Principles, 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. It 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. Finally, 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 that, combined with competitive market forces, this principle will lead to a situation where the whole switching process is, generally, free of charge for the consumers.

Monitoring by national banking associations and third party evaluation are also included in the Principles.

The Principles will apply in each Member State as from 1 November 2009. They can be found at:


Main features of the Common Principles for Bank Account Switching

  • Banks will provide consumers with a switching guide, which will explain to them what steps need to be taken in the switching process, by whom and within which timeframe.
  • Consumers who want to switch their bank account can choose the new bank as a primary contact point, which means that the new bank will act as an intermediary between the consumer and his/her old bank as well as some creditors. In particular, the new bank will get the necessary information about the consumer's recurrent payments from the old bank and ask the old bank to terminate these payments on the old account. It will reinstall these recurrent payments on the new account and will either inform the third parties about the consumer's new account details or assist him/her in doing so. It will also assist the consumer in requesting the old bank to close the old account and transfer the remaining balance.
  • The Common Principles set clear deadlines for the old and new bank. The old bank has to provide all the available information about the consumer's recurrent payments within seven banking days upon receiving the request either from the new bank or from the consumer. The new bank has to set up recurrent payments on the new account within seven days of receiving the necessary information. Within the same seven days the new bank will either inform third parties about the consumer's new account details or assist him/her in doing so.
  • The provision of information on recurrent payments by the old bank to the consumer and to the new bank will generally be free of charge. The closure of old account, if any, will also generally be free of charge, in line with the Payment Services Directive. Fees, if any, for other switching related services will be appropriate and in line with costs.
  • Compliance with the Principles will be monitored by the national banking associations. There will also be an evaluation process conducted by either a body involving national consumer associations or an independent body.
  • EBIC will undertake a review process one year after the entry into force of the Principles at national level and will regularly inform the European Commission and consumer associations about their operation.
  • The Common Principles will be implemented by national banking associations by 1 November 2009. The European Commission and consumer associations will be kept informed about the status of implementation of the Common Principles at national

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