Market practices all across Europe – Cyprus included – for fees and charges by financial institutions are causing significant detriment to consumers, the European Banking Authority (EBA) said in a recently released report.
EBA’s thematic review focused on the transparency and level of fees and charges levied by financial institutions on the retail banking products in the EU.
Overall, the review finds that fees and charges vary greatly in terms of level and type not only across the European Union market, but also across financial institutions within the same jurisdiction.
Furthermore, the variety of types for fees and charges cause different levels of detriment to consumers, and, with the exception of payment accounts, fees and charges are difficult to compare between providers.
More specifically, the review finds that national legal frameworks are mostly subject to the general principle of freedom of contract.
Despite the improvements in consumer protection brought about by several EU sectoral directives introduced in the past decade to regulate the banking retail products, market practices for fees and charges are causing significant detriment to consumers.
With the exception of payment accounts, the low level of harmonisation and standardization of fees within EU Member States might cause detriment to consumers when comparing effectively costs of products and services offered by financial institutions.