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Implementation of the EU Payment Accounts Directive in the UK (2014/92/EU)

The Payment Accounts Directive (“PAD”) was adopted by the European Commission (“EC”) on 8 May 2013 and subsequently, in revised form, adopted by the European Parliament and Council on 23 July 2014.

The UK government intends to lay the necessary implementing legislation before Parliament in Autumn 2015.

The EC identified a number of problems in the EU’s retail banking sector. Payment account fee structures often lack transparency, making it difficult for consumers to compare the benefits of different accounts. Further, consumers often find it difficult to switch bank accounts, or find the prospect of doing so daunting. Consumer inertia often leads to uncompetitive markets, and high account charges and fees. Finally, millions of consumer in the EU have no payment account at all.

The objectives of PAD are threefold: to enable consumers to compare fees between different payment accounts; to make it easier for consumers to switch between different payment accounts, including across Member States; and to improve access to basic payment accounts for consumers legally resident in any EU country.

The impact of PAD will be wide-ranging in some Member States, but in the UK, with a mature retail banking sector, consumers will notice fewer changes. The legislation applies to current accounts.

The Money Advice Service will produce a comparison website to help consumers compare the costs of fees. Banks will be compelled to produce fee information documents setting out the most common fees in a comparable format along with glossaries explaining key terms.

Since September 2013 the Current Account Switch Service (“CASS”) has, in the UK, met the requirements of the PAD switching provisions. CASS enables consumers, amongst other things, to switch from one current account to another within seven working days. 

The basic bank account regime introduced by PAD has, in many respects, already been implemented in the UK by means of a voluntary agreement between the government and the nine largest banks, which was introduced after PAD was adopted. PAD will also, however, require the government to introduce a legal right to a bank account, which can be enforced by means of an application to the court in the event that the bank refuses access to an account.

Oliver Hyams / 1st Oct 2015


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