Response to consultation on Technical Standards on standardised terminology and disclosure documents under the PAD
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The chosen option A using a broad approach where a large number of sub-categories will need to be introduced in the Fee Information Document (FID) will result in a relatively long and complex list of services which will vary significantly between the banks. Some will have a large number of sub-services and for each of those detailed content and price information, while others will not. The clear overview may then not be achieved. It needs to be kept in mind that besides the FID the consumer will also receive the banks’ complete price list. For that reason the FID does not need to be exhaustive in each category.
The Swedish Bankers’ Association has a preference for option b), focusing on the most frequently used services or those which imply the highest costs following the EBA criteria, presented in a clear way, complementing the full information the consumer will get under all circumstances. The national preliminary list elaborated by the Swedish Supervisory Authority which was sent to EBA at an earlier stage seemed in an accurate way focus on a limited number of fairly specific services widely used. As we understand the consultation document that list would be categorised as an option b list.
• “Overdraft on a payment account” (h) does not exist in Sweden as a specific service. We are aware that is the case in some other countries. A consumer cannot in advance agree on an overdraft of an account in Sweden. The Swedish meaning of the term is that a consumer, violating the agreement with the bank, exceeds the available sum on his or her account. An overdraft fee then will need to be paid. Consequently it is not the matter of a service in the FID context. It would be most inappropriate that in the FID the consumer should be informed what it costs to misuse the account, i.e. something which is uncommon, which should be avoided and may signal that it is an acceptable behaviour.
• See question 2 on “overdraft on a payment account” (“kontokredit”). The service intended by EBA is rare and the present Swedish term misleading. If the service will figure on the list, which hopefully will not be the case, the translation into Swedish should be “övertrasseringsrätt”. This is not a common term since the service as such does not exist. However, it is as close one can get the meaning of the English term.
For your information, the term “övertrassering” is more common in the Swedish language but it is not linguistically equivalent to “overdraft on a payment account” in the meaning of the FID. “Övertrassering” is not a service linked to a payment account but a fee paid by the consumer in case of misuse of his or her account. The term cannot for that reason be used in the FID.
• Regarding the definition of debit and credit card: Inconsistencies when the terms “account” (konto) and “payment account” (betalkonto) are used. Should be payment account.
Banks in Sweden have modernised and changed their way of communicating with their customers since several years back. It is important to have a consumer perspective when addressing the customers departing from consumers’ needs, using a plain and simple language. We note that the EBA technical standards seem somehow conservative with a top down perspective.
As explained in our response to question 3 there is a need to be able to explain the features of the services, present differing prices for one and the same service depending on the channel used etc. Focus must be to make the FID consumer friendly, clear and transparent rather than focusing on the number of pages or the space to be used. A too formalistic approach will be counterproductive. Given that the FID permits the banks to explain the features of the services, the Swedish Bankers’ Association welcomes that there is no limit to the number of pages of the FID (para 80).
Para 106: It should be considered whether the deletion of sub headings and cells which are not applicable may make it more difficult for the consumer to get an overview when comparing the FID:s of different banks.
Regarding packages, following the given example, this seems to refer to bundles comprising several services, e.g. a student package. Contrary to for instance a debet card which includes a travel insurance, which will be displayed under debit cards and where the inclusion of a travel insurance is mentioned among the features of the card. This is logic since otherwise most debit cards would figure under packages which would be unclear and make comparisons difficult. Again possibly guidance and clarification may be needed to avoid any hesitation on this point by NSAs.
At the top of the statement there should be space for an optional sentence: “More information will be found in your annual statement from the bank”. This is necessary since otherwise consumers may be confused by receiving several statements which include different services (the bank’s annual statements may also include investments products etc. and obligatory tax related information which does not figure on the SoF).
Para 124: The intention seems to be that banks in the box “Statement of fees” should chronologically number the statements. The Swedish Bankers’ Association find that information of little use for the consumer. The importance is to what period the statement refers. We suggest the deletion of that line.
Clarification is needed in the instructions regarding accounts with several account holders. We suggest that the statement should include information on the total fees and interests paid in relation to the account. To divide fees etc. by the number of account holders will both be confusing for the consumer and demand far reaching and costly system adaptions for the banks. Thus, clarification is needed in the instruction on this point. On the same topic, it should be indicated what contact details to use in these cases and there is need for a standard text, e.g. “Remember that if you are several account holders the information in this SoF indicates the total amount of fees paid for the account”.
See question 2. On the SoF shall appear services “linked to your payment account”. In Sweden credit cards in most cases are not linked to an account. Consequently credit card fees and interest rates will in most cases not be displayed on the SoF which relates to a particular bank account.
As explained in the response to question 2 agreed overdraft linked to an account does not exist in Sweden. Given this, “Total interest paid” will in the case of Sweden only include information in cases where the consumer wrongly has misused his or her account and been obliged to pay an interest rate.
General remark
A final general remark: Several EU legislative acts including information requirements enter into force shortly. For instance regarding the statement of fees a coordination between the PAD and MiFID 2 requirements would be beneficiary for the consumer to get a better overview and, from a sustainability point of view, it would limit the amount of paper.
Question 1: Do you agree with the EBA’s decision to take a broad approach to defining ‘service’? Please explain your reasoning.
The aim with selecting a number of core services is to make it easy for the consumer to rapidly get an overview and to facilitate comparisons. The consumer must easily be able to distinguish different kinds of services and what is included in each service. It is key to avoid that the consumer gets confused or wrongly compare the prices of different market actors’ services when in fact the services differ in functionality and content.The chosen option A using a broad approach where a large number of sub-categories will need to be introduced in the Fee Information Document (FID) will result in a relatively long and complex list of services which will vary significantly between the banks. Some will have a large number of sub-services and for each of those detailed content and price information, while others will not. The clear overview may then not be achieved. It needs to be kept in mind that besides the FID the consumer will also receive the banks’ complete price list. For that reason the FID does not need to be exhaustive in each category.
The Swedish Bankers’ Association has a preference for option b), focusing on the most frequently used services or those which imply the highest costs following the EBA criteria, presented in a clear way, complementing the full information the consumer will get under all circumstances. The national preliminary list elaborated by the Swedish Supervisory Authority which was sent to EBA at an earlier stage seemed in an accurate way focus on a limited number of fairly specific services widely used. As we understand the consultation document that list would be categorised as an option b list.
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.
• “Provision of a credit card with a payment account” (c) does not reflect common practices on the Swedish market. It is fairly rare that a credit card is linked to a particular account. The credit card is a separate service where the consumer has the choice whether the costs incurred should be transferred from a particular account or paid by other means. From a FID perspective we question if a credit card is a basic service linked to a bank account. Debit cards are necessary means of payment, used by almost all customers, and do not involve any risk of indebtedness. Credit cards follow another logic and can hardly be seen as a basic feature of a bank account.• “Overdraft on a payment account” (h) does not exist in Sweden as a specific service. We are aware that is the case in some other countries. A consumer cannot in advance agree on an overdraft of an account in Sweden. The Swedish meaning of the term is that a consumer, violating the agreement with the bank, exceeds the available sum on his or her account. An overdraft fee then will need to be paid. Consequently it is not the matter of a service in the FID context. It would be most inappropriate that in the FID the consumer should be informed what it costs to misuse the account, i.e. something which is uncommon, which should be avoided and may signal that it is an acceptable behaviour.
Question 3: Do you consider the drafting decisions taken by the EBA for the standardised terms and definitions, and the resultant provisions in Recitals of the draft RTS, to be suitable for achieving the aims of the Directive of enhancing transparency and comparability? Please explain your reasoning.
In paragraph 50 it is stated that that the definitions should focus on the service itself rather than defining precisely what is meant by the constituent elements of the service. The Swedish Bankers’ Association does not disagree with this approach but wishes to stress that the FID must provide space and the possibility for the banks to elaborate on the features and usage possibilities of a service, for instance a card. To simply provide the annual fee for a “debit card” without being able to explain what differs the card from other cards in the bank and in other banks will not make the FID very useful and will be misleading from a consumer point of view. Different levels of the annual fee may be explained by the fact that one card includes a travel insurance while another does not. Also see response to question 5.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.
• “Account maintenance” (a): The Swedish translation should be “Innehav av konto”.• See question 2 on “overdraft on a payment account” (“kontokredit”). The service intended by EBA is rare and the present Swedish term misleading. If the service will figure on the list, which hopefully will not be the case, the translation into Swedish should be “övertrasseringsrätt”. This is not a common term since the service as such does not exist. However, it is as close one can get the meaning of the English term.
For your information, the term “övertrassering” is more common in the Swedish language but it is not linguistically equivalent to “overdraft on a payment account” in the meaning of the FID. “Övertrassering” is not a service linked to a payment account but a fee paid by the consumer in case of misuse of his or her account. The term cannot for that reason be used in the FID.
• Regarding the definition of debit and credit card: Inconsistencies when the terms “account” (konto) and “payment account” (betalkonto) are used. Should be payment account.
Banks in Sweden have modernised and changed their way of communicating with their customers since several years back. It is important to have a consumer perspective when addressing the customers departing from consumers’ needs, using a plain and simple language. We note that the EBA technical standards seem somehow conservative with a top down perspective.
Question 5: Do you consider the FID template that is being proposed in the draft ITS and its Annex to be suitable to achieve the aims of the Directive? Please explain your reasoning.
At the beginning of the FID, second bullet point there is space for the provider to inform the consumer where to find full information regarding the services linked to the account. It is important that the consumers are properly informed where they will get further information both regarding services figuring in the FID and other services linked to the account. This is necessary since otherwise consumers will be confused by receiving several price lists or wrongly believe that the FID is exhaustive. We suggest that the text is redrafted, moved to the very top of the FID and clearly marked to avoid any kind of misunderstanding and confusion.As explained in our response to question 3 there is a need to be able to explain the features of the services, present differing prices for one and the same service depending on the channel used etc. Focus must be to make the FID consumer friendly, clear and transparent rather than focusing on the number of pages or the space to be used. A too formalistic approach will be counterproductive. Given that the FID permits the banks to explain the features of the services, the Swedish Bankers’ Association welcomes that there is no limit to the number of pages of the FID (para 80).
Question 6: Do you consider the common symbol in the FID template that is being proposed in the draft ITS and its Annex suitable to achieve the aims of the Directive? Please explain your reasoning.
No views on the symbol. It should be added a text next to the symbol “Standardised EU information sheet” since many consumers will not be aware of the symbol and may not understand why besides the bank’s normal price list they also receive the FID.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.
Para 102: The Swedish Bankers’ Association welcomes that space is only limited when it comes to the width of the columns. See comments under question 3 and 5. There needs to be unlimited space to explain the features of each service provided, several prices may figure depending on channel and to which customer group the service is provided (students, VIP customers etc.). We understand from different places in the text that it is EBA’s view that there needs to be room for this kind of complete product information (the contrary would make the FID misleading and of no value for the consumer) but this should be clarified to avoid any misunderstanding by National Supervisory Authorities (NSA).Para 106: It should be considered whether the deletion of sub headings and cells which are not applicable may make it more difficult for the consumer to get an overview when comparing the FID:s of different banks.
Regarding packages, following the given example, this seems to refer to bundles comprising several services, e.g. a student package. Contrary to for instance a debet card which includes a travel insurance, which will be displayed under debit cards and where the inclusion of a travel insurance is mentioned among the features of the card. This is logic since otherwise most debit cards would figure under packages which would be unclear and make comparisons difficult. Again possibly guidance and clarification may be needed to avoid any hesitation on this point by NSAs.
Question 8: 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 clear and easy to follow? Please explain your reasoning.
See question 7. Questions occur when following the instructions. There is room for clarifications in the text.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.
In Sweden it is common that consumers have several payment accounts with basic features (those covered by scope of the directive) in the same bank. These consumers will receive a number of SoF:s. The banks should have the option to merge information relating to one consumer having several accounts in one SoF.At the top of the statement there should be space for an optional sentence: “More information will be found in your annual statement from the bank”. This is necessary since otherwise consumers may be confused by receiving several statements which include different services (the bank’s annual statements may also include investments products etc. and obligatory tax related information which does not figure on the SoF).
Para 124: The intention seems to be that banks in the box “Statement of fees” should chronologically number the statements. The Swedish Bankers’ Association find that information of little use for the consumer. The importance is to what period the statement refers. We suggest the deletion of that line.
Question 10: Do you consider the common symbol that is being proposed in the draft ITS and its Annex to be suitable to achieve the aims of the Directive? Please explain your reasoning.
No views on the symbol. Possibly a text should be added next to the symbol “Standardised EU statement of fees” since many consumers will not be aware of the symbol and may not understand why besides the bank’s annual statement they also receive the SoF.Question 11: Do you consider the proposed instructions for payment services providers on how to complete the SoF template contained in Articles 2 to 16 of the draft ITS, to be suitable to achieve the aims of the Directive? Please explain your reasoning.
A general remark is that several of the Swedish Bankers’ Association’s members do not find it obvious to follow the instructions and fill out the form in a way that properly reflects the services they offer and that provides consumers with a clear picture of the cost of their engagements. This is probably unavoidable when drafting a standard which is supposed to work in all Member States which differ a lot when it comes to what services that are offered and how they are customized. To understand what services – financial and others - they actually get at what price, Swedish consumers will probably in many cases be better informed by the banks’ annual statements. For this reason we wish to refer back to our response to question 9 and stress the importance of a sentence guiding the customer that more information is to be found in his or her annual statement from the bank.Clarification is needed in the instructions regarding accounts with several account holders. We suggest that the statement should include information on the total fees and interests paid in relation to the account. To divide fees etc. by the number of account holders will both be confusing for the consumer and demand far reaching and costly system adaptions for the banks. Thus, clarification is needed in the instruction on this point. On the same topic, it should be indicated what contact details to use in these cases and there is need for a standard text, e.g. “Remember that if you are several account holders the information in this SoF indicates the total amount of fees paid for the account”.
See question 2. On the SoF shall appear services “linked to your payment account”. In Sweden credit cards in most cases are not linked to an account. Consequently credit card fees and interest rates will in most cases not be displayed on the SoF which relates to a particular bank account.
As explained in the response to question 2 agreed overdraft linked to an account does not exist in Sweden. Given this, “Total interest paid” will in the case of Sweden only include information in cases where the consumer wrongly has misused his or her account and been obliged to pay an interest rate.
Question 12: Do you consider the proposed instructions for payment service providers on how to complete the SoF template, contained in Articles 2 to 16 of the draft ITS, to be clear and easy to follow? Please explain your reasoning.
See question 11.General remark
A final general remark: Several EU legislative acts including information requirements enter into force shortly. For instance regarding the statement of fees a coordination between the PAD and MiFID 2 requirements would be beneficiary for the consumer to get a better overview and, from a sustainability point of view, it would limit the amount of paper.