Response to consultation on Technical Standards on standardised terminology and disclosure documents under the PAD
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We believe that some services that the EBA has selected for standardised terms and definitions are not adapted to the common practices in Slovakia. Integrating some services which are not all commonly used in Slovakia in the standardised terms and definitions could lead to misleading interpretation in the definition of the services and in their comparison. For example the ‘provision of a credit card with the payment account’ does not correspond to services and practice available in Slovakia. This service is offered separately, not as part of payment account.
In reference to article 3.5 from the PAD it should be therefore clarified that the Union standardised terminology established by the EBA should be integrated to the national list but should not impose as a basic service linked to a bank account which does not exist at national level (e.g. credit cards). It means that it concerns only the integration of standardised terms for services already included in the national provisional list. MS which are not concerned by certain services should not be obliged to integrate them in their national list.
If term Providing a credit card will remain as part of Union standardised terminology, it should be clarified and clearly stated that PSPs are not obliged to provide FID and SoF for credit cards, or credit card accounts. Since credit cards are regulated as part of consumer credit by CCD (Consumer credit directive 2008/48/EC), we believe they should not even be one of Union standardised terminology terms.
We believe terms and definitions in member states should be not only correctly translated to all languages, but also adjusted to commonly used terms and legislative definitions. We propose amendments in Slovak version of annex.
Term “Maintaining the account” - “Vedenie účtu” should be changed to “Vedenie bežného účtu” since common account – “bežný účet” is term used in Slovak civil law as legal definition.
This term “bežný účet” should also be used in all related definitions. Definition of “Vedenie bežného účtu” should begin “Poskytovateľ účtu vedie bežný účet …” The end of first sentence in definition of “Poskytnutie debetnej karty” should sound “… spojenú s jeho bežným účtom.” The end of first sentence in definition of “Poskytnutie kreditnej karty” should sound “… spojenú s jeho bežným účtom.” The end of second sentence in definition of “Poskytnutie kreditnej karty” should sound “… alebo čiastočne z bežného účtu klienta.” First sentence in definition of “Prečerpanie” should sound “…, že klient na bežnom účte nemá …” The end of first sentence in definition of “Prevod” should sound “… podľa pokynov klienta z jeho bežného účtu na iný účet.” The end of first sentence in definition of “Trvalý príkaz” should sound “… podľa pokynov klienta z jeho bežného účtu na iný účet.” The end of first sentence in definition of “Inkaso” should sound “… finančné prostriedky z bežného účtu klienta na účet príjemcu.” The end of first sentence in definition of “Výbery hotovosti” should sound “… hotovosť zo svojho bežného účtu.”
Term “Credit transfer” - “Úhrady” should be changed to “Prevod” since this term is used more commonly by the banks and understood by consumers, even though it is not a legal definition.
Since word “zákazník” is commonly used in Slovakia in other retail services other than banking, and consumers are used to term client - “klient”, we propose to replace these terms in all definitions in correct form.
EBA Consultation paper provides a lot of explanations, but in this part we are missing guidance on how to approach these terms and their associated fees. Term and its corresponding fee should be “applied” in its original (provided by EBA) meaning, or should be slightly adjusted to take into account national fee structure? For example there are three sub-terms and three different fees for debit card maintenance (providing of a debit card, maintaining a debit card, issuing a debit card) and most of Slovak banks apply “standard” fees for this product as maintaining debit card. But EBA used the term Providing a debit card, and if this term will be included into National provisional list consumers could receive information on fee which does not actually represent correct price for this service.
While the PAD does not provide any requirement on the presentation of several packages the EBA in its draft ITS clearly states in the Recital 6 that “if services that exceed the quantity covered by a package are not included in the national final list of most representative services and therefore, are not displayed in the fee information document, they should be shown in a separate table and not combined with information on the content of the packages, in order to give consumers a clear overview of the package.”
This requirement combined with the huge constraint on the format will lead to significantly increase the document length (multiplication of the number of pages) which is in contradiction with the mandate given in the PAD to have a short document.
For the sake of clarity and of having a readable/consumer friendly document, we would recommend leaving the possibility for PSP to refer in the FID to a single example of a package which is the most commonly used by its customers. It would avoid ending with many pages describing the various packages which could confuse the consumers instead of providing him/her with an overview of the type of packages available.
If PSPs would provide fees for all these services separately in FID, they would actually provide consumer table of almost all the fees related to basic account witch would have no comparability value for consumer.
As we understand the FID structure, PSP should show all services included in the package in first cell of the fist section “Package of services”. This cell has limited width, so if the description of package is not very short, it would actually roll on to couple of pages.
For example here is one actual package description, which should be put inside this this cell: current account maintenance in EUR without minimum balance; unlimited number of electronic account statements in selected frequency to e-mail address; 1 Visa Electron debit payment card; debit card Mobile payments without insurance; unlimited number of PIN code changes via ATM; unlimited number of automated transactions per month, including card payments, withdrawals from banks ATMs and withdrawals from ATMs of the bank group; unlimited number of cash withdrawals in foreign currency in branch; optional account overdraft; services provided via electronic communication media; unlimited number of e-mails and selected types of SMS within banking service; administration of standing orders and SEPA direct debits via electronic communication media (Internet banking and Internet banking for mobile devices; Savings system and related services (i.e. charging all transactions executed in the Savings system and services provided via electronic communication media.
We would suggest EBA to not retain this request as this information is unnecessary at this stage since the consumer knows the content of the package he has subscribed (details in the contractual documents), but also contributes to increase the length of the SOF and in consequence impairs to the readability of the SoF.
The objective at this stage is to allow the consumer to estimate the costs of his/her consumption of the banking services that he has already chosen and subscribed and not to give him commercial information on the content of the offers. This information was provided to him prior to this in the FID as well as in the relevant contractual documents : the FID pre-contractual document allows him to compare offers before subscribing and the contractual documents to know exactly the content of what he has chosen to subscribe. Therefore in the interest of the consumer it is better that each documentation (pre contractual, contractual, post contractual) sticks to its main objective in terms of customer information.
We would therefore suggest that the EBA does not keep the above mentioned requirement, as it may have a negative impact on the readability of the SoF, owing to the increase of its volume as a consequence of this requirement. In certain countries consumer associations consider essential to have a short document.
Slovak banking association disagrees with chronological numbering the statements in the box ‘statement of fees’. In our view, this information is of little or no value for the consumer. The attention should focus rather on the period the statement is referring to.
We therefore suggest the deletion of this line.
The draft ITS requests statement of fees to be included in the package of services subscribed by the consumer (art 11) and the statement of each service linked to the payment account (art 12) display the number of time the service was charged. This information could be impossible to give in some cases: for example in the case all in fees or capped fees. Moreover, this is not compliant with the PAD as Article 5.1 states that the consumer must be informed on the number of times the service was used during the period and not the number of time the service was charged.
Considering fee charging policy of Slovak banks, it is common to use services but not charged or fully charged. We would suggest retaining this reference of a service used, more relevant for the consumer, and consistent with PAD.
We propose that discounts or retrocessions could be displayed with more visibility in the SoF, at the choice of the PSD.
As reductions/ discounts will be difficult to indicate on the SoF (except at the bottom of the document under the heading Additional information"), we would suggest, that they could, at the discretion of the PSP, alternatively appear as a line of fee or in a separate column."
Question 2: Do you consider the services that the EBA has selected for standardised terms and definitions to be suitable to achieve the aims of the Directive? Please explain your reasoning.
Integration of the Union standardised terminology into National provisional list will be challenging, and we believe that some degree of flexibility should be provided in the definition of those terminologies. For example, it would be possible to use the harmonized definition as the core and add a short complementary text to clarify national specificities. The complementary text safeguards the harmonized definition and preserves national specific definitions/terminologies.We believe that some services that the EBA has selected for standardised terms and definitions are not adapted to the common practices in Slovakia. Integrating some services which are not all commonly used in Slovakia in the standardised terms and definitions could lead to misleading interpretation in the definition of the services and in their comparison. For example the ‘provision of a credit card with the payment account’ does not correspond to services and practice available in Slovakia. This service is offered separately, not as part of payment account.
In reference to article 3.5 from the PAD it should be therefore clarified that the Union standardised terminology established by the EBA should be integrated to the national list but should not impose as a basic service linked to a bank account which does not exist at national level (e.g. credit cards). It means that it concerns only the integration of standardised terms for services already included in the national provisional list. MS which are not concerned by certain services should not be obliged to integrate them in their national list.
If term Providing a credit card will remain as part of Union standardised terminology, it should be clarified and clearly stated that PSPs are not obliged to provide FID and SoF for credit cards, or credit card accounts. Since credit cards are regulated as part of consumer credit by CCD (Consumer credit directive 2008/48/EC), we believe they should not even be one of Union standardised terminology terms.
Question 4: Do you consider the terms and definitions proposed by the EBA in the Annexes to the draft RTS, and the resultant provisions in the Recitals of the draft RTS, to be adequate for achieving the aims of the Directive of enhancing transparency and comparability? If not, please provide alternative terms and definitions and their underlying rationale.
We would like to thank you for all the work that you have done on standardised terminology.We believe terms and definitions in member states should be not only correctly translated to all languages, but also adjusted to commonly used terms and legislative definitions. We propose amendments in Slovak version of annex.
Term “Maintaining the account” - “Vedenie účtu” should be changed to “Vedenie bežného účtu” since common account – “bežný účet” is term used in Slovak civil law as legal definition.
This term “bežný účet” should also be used in all related definitions. Definition of “Vedenie bežného účtu” should begin “Poskytovateľ účtu vedie bežný účet …” The end of first sentence in definition of “Poskytnutie debetnej karty” should sound “… spojenú s jeho bežným účtom.” The end of first sentence in definition of “Poskytnutie kreditnej karty” should sound “… spojenú s jeho bežným účtom.” The end of second sentence in definition of “Poskytnutie kreditnej karty” should sound “… alebo čiastočne z bežného účtu klienta.” First sentence in definition of “Prečerpanie” should sound “…, že klient na bežnom účte nemá …” The end of first sentence in definition of “Prevod” should sound “… podľa pokynov klienta z jeho bežného účtu na iný účet.” The end of first sentence in definition of “Trvalý príkaz” should sound “… podľa pokynov klienta z jeho bežného účtu na iný účet.” The end of first sentence in definition of “Inkaso” should sound “… finančné prostriedky z bežného účtu klienta na účet príjemcu.” The end of first sentence in definition of “Výbery hotovosti” should sound “… hotovosť zo svojho bežného účtu.”
Term “Credit transfer” - “Úhrady” should be changed to “Prevod” since this term is used more commonly by the banks and understood by consumers, even though it is not a legal definition.
Since word “zákazník” is commonly used in Slovakia in other retail services other than banking, and consumers are used to term client - “klient”, we propose to replace these terms in all definitions in correct form.
EBA Consultation paper provides a lot of explanations, but in this part we are missing guidance on how to approach these terms and their associated fees. Term and its corresponding fee should be “applied” in its original (provided by EBA) meaning, or should be slightly adjusted to take into account national fee structure? For example there are three sub-terms and three different fees for debit card maintenance (providing of a debit card, maintaining a debit card, issuing a debit card) and most of Slovak banks apply “standard” fees for this product as maintaining debit card. But EBA used the term Providing a debit card, and if this term will be included into National provisional list consumers could receive information on fee which does not actually represent correct price for this service.
Question 7: Do you consider the proposed instructions for the completion of the FID template contained in Articles 2 to 11 of the draft ITS, to be suitable to achieve the aims of the Directive? Please explain your reasoning.
There is lack of clear guidance on how to handle packaged offers with some degree of sophistication and/or including an additional set of services not integrated in national’s final lists.While the PAD does not provide any requirement on the presentation of several packages the EBA in its draft ITS clearly states in the Recital 6 that “if services that exceed the quantity covered by a package are not included in the national final list of most representative services and therefore, are not displayed in the fee information document, they should be shown in a separate table and not combined with information on the content of the packages, in order to give consumers a clear overview of the package.”
This requirement combined with the huge constraint on the format will lead to significantly increase the document length (multiplication of the number of pages) which is in contradiction with the mandate given in the PAD to have a short document.
For the sake of clarity and of having a readable/consumer friendly document, we would recommend leaving the possibility for PSP to refer in the FID to a single example of a package which is the most commonly used by its customers. It would avoid ending with many pages describing the various packages which could confuse the consumers instead of providing him/her with an overview of the type of packages available.
If PSPs would provide fees for all these services separately in FID, they would actually provide consumer table of almost all the fees related to basic account witch would have no comparability value for consumer.
As we understand the FID structure, PSP should show all services included in the package in first cell of the fist section “Package of services”. This cell has limited width, so if the description of package is not very short, it would actually roll on to couple of pages.
For example here is one actual package description, which should be put inside this this cell: current account maintenance in EUR without minimum balance; unlimited number of electronic account statements in selected frequency to e-mail address; 1 Visa Electron debit payment card; debit card Mobile payments without insurance; unlimited number of PIN code changes via ATM; unlimited number of automated transactions per month, including card payments, withdrawals from banks ATMs and withdrawals from ATMs of the bank group; unlimited number of cash withdrawals in foreign currency in branch; optional account overdraft; services provided via electronic communication media; unlimited number of e-mails and selected types of SMS within banking service; administration of standing orders and SEPA direct debits via electronic communication media (Internet banking and Internet banking for mobile devices; Savings system and related services (i.e. charging all transactions executed in the Savings system and services provided via electronic communication media.
Question 9: Do you consider the SoF template that is being proposed in draft ITS and its Annex to be suitable to achieve the aims of the Directive? Please explain your reasoning.
Pursuant to article 11-1-a of the draft ITS PSPs are requested to provide information on content of the package while it is not requested in the PAD.We would suggest EBA to not retain this request as this information is unnecessary at this stage since the consumer knows the content of the package he has subscribed (details in the contractual documents), but also contributes to increase the length of the SOF and in consequence impairs to the readability of the SoF.
The objective at this stage is to allow the consumer to estimate the costs of his/her consumption of the banking services that he has already chosen and subscribed and not to give him commercial information on the content of the offers. This information was provided to him prior to this in the FID as well as in the relevant contractual documents : the FID pre-contractual document allows him to compare offers before subscribing and the contractual documents to know exactly the content of what he has chosen to subscribe. Therefore in the interest of the consumer it is better that each documentation (pre contractual, contractual, post contractual) sticks to its main objective in terms of customer information.
We would therefore suggest that the EBA does not keep the above mentioned requirement, as it may have a negative impact on the readability of the SoF, owing to the increase of its volume as a consequence of this requirement. In certain countries consumer associations consider essential to have a short document.
Slovak banking association disagrees with chronological numbering the statements in the box ‘statement of fees’. In our view, this information is of little or no value for the consumer. The attention should focus rather on the period the statement is referring to.
We therefore suggest the deletion of this line.
The draft ITS requests statement of fees to be included in the package of services subscribed by the consumer (art 11) and the statement of each service linked to the payment account (art 12) display the number of time the service was charged. This information could be impossible to give in some cases: for example in the case all in fees or capped fees. Moreover, this is not compliant with the PAD as Article 5.1 states that the consumer must be informed on the number of times the service was used during the period and not the number of time the service was charged.
Considering fee charging policy of Slovak banks, it is common to use services but not charged or fully charged. We would suggest retaining this reference of a service used, more relevant for the consumer, and consistent with PAD.
We propose that discounts or retrocessions could be displayed with more visibility in the SoF, at the choice of the PSD.
As reductions/ discounts will be difficult to indicate on the SoF (except at the bottom of the document under the heading Additional information"), we would suggest, that they could, at the discretion of the PSP, alternatively appear as a line of fee or in a separate column."