A new law should make it easier for consumers to open a bank account, get information regarding fees and to change to another bank.
On 18th September 2016, the so called "Verbraucherzahlungskontogesetz", short VZGK, will come into effect. With this, Austria implements the Directive on payment accounts (Directive 2014/92/EU) of the European Union that aims at harmonising information requirements of banks to their customers. Furthermore, it will become possible / easier for those who found it difficult or weren't able to open a bank account to do so in the future. Another step in the direction of a unified European single market is the simplified change of bank accounts even cross-border.
Information and comparison
The VZKG settles which details regarding a payment account a bank has to present to consumers before they conclude a contract. Especially regarding the different fees they will have to give comprehensive information. These rules applies to single accounts as well as to packages that include several services of the bank.
Furthermore, the Austrian Chamber of Labour (Bundesarbeitskammer) will install an online comparison platform where consumers can enter their own criteria for a bank account and will get an overview of exisiting offers, listed by the costs. Banks will have to mention this website to potential customers.
The aim of these new rules is to make fees of payment accounts more transparent to consumers and to enable them to decide which offer is best for them.
Banks have to submit the requested information either on paper or on another durable medium (e.g. via mail) as well as provide it on their website. The most common functions of a bank account will be described with EU-wide standardised terms in order to make them comparable.
Warning about long-term deficit
Existing clients will also get more information from their bank: If their account is overdrawn for more than three months and if the deficit is one-and-a-half times more than the average payments on the account, the bank is obliged to inform the consumer about it and also offer him a one-on-one consultation about possible financing alternatives. Also the bank has to mention the online comparison platform of the Chamber of Labour to the consumer.
Switching accounts made easy
Please note: The following information regards switching accounts on a national level, from one Austrian bank to another. If you want to find out more regarding a cross-border change of payment accounts, please read here.
If a consumer decides to switch to a new bank, he will get support from the new as well as the old bank. An information regarding the respective services and deadlines will be given to him in advance.
The consumer has to fill in a form in order to enable the new bank to perform the switching service. In the form he will also state a date when the new account will become effective. The new bank has to take care of the following things:
- Request from the old bank a list of the existing standing orders for credit transfers and available information on direct debit mandates that are being switched, as well as recurring incoming credit transfers and creditor-driven direct debits executed on the consumer’s payment account in the previous 13 months.
- Accept / install those payment flows at the new bank account.
- Inform the involved persons or companies (payers or payment receivers) about the new account details of the consumer. If he wants to do this himself, the bank has to give him a sample letter.
The old bank has to submit the requested list within five working days after the demand. Furthermore, it has to reject and cancel all payment flows on the old account and to transfer the remaining positive balance to the new account. The old bank closes the payment account on the date stated by the consumer or after a possible termination period.
The information regarding payment flows have to be submitted free of charge. Regarding the closing of the account, the old bank can only charge fees if they were agreed upon in the contract or if the contract was concluded for less than 12 months.
Basic payment account for everyone
According to the new law, every consumer legally resident in the EU is entitled to a payment account with basic features, including direct debits, cash withdrawals, payment transactions through a payment card and credit transfers. However, it is not possible to overdraw such a bank account.
The VZKG enables e.g. homeless or indebted people, asylum seekers and others to open a payment account. A bank is only allowed to reject them if they commited a criminal defence against the bank or one of its employees in the past.