Decree Law No. 107/2017
- Issuer: Finance
- Diploma Type: Decree Law
- Number: 107/2017
- Pages: 5212 - 5230
Summary in plain english
This decree-law introduces into the Portuguese law the European Directive 2014/92/EC about:
- the possibility for consumers to compare fees charged by different providers of payment accounts
- changing a payment account within the European Union
- access to minimal banking service accounts (accounts with basic characteristics).
A payment account is an account used to make payments. It can be held by one or more people. It allows consumers to do at least one of the following operations:
- deposit money and other valuables
- withdraw money
- make and receive payments of various kinds, including credit.
Fees are the amounts that payment-service providers charge consumers for the services they provide through payment accounts.
Payment-service providers are banks and other entities providing such services.
Minimal banking services are services provided to citizens through a bank account with reduced costs. In these cases, banks may not charge, for a set of services, annual expenses of more than 1% of the value of the social support index (which is a reference used to calculate social support).What will change? It will be easier to compare charged fees
The Bank of Portugal must make available to consumers:
a) The list of the most representative payment services — the 10 to 20 most used or more expensive services. The Bank of Portugal must evaluate this list every four years and, if necessary, update it.
b) Standardized terminology on payment services — the list of words used when referring to those services. It must be in accordance with the terminology defined by the European Commission, so that the words used mean the same throughout the European Union.
In communication with consumers, payment-service providers must always use this terminology, even if they also use trademarks.
c) Information on their website that allows you to compare the fees charged by different payment-service providers. It should include at least the most representative service fees. The consultation is free.
Payment-service providers must make available to consumers, free of charge, on paper or on another durable format, the three information documents indicated below. These documents should use the standard terminology defined by the Bank of Portugal:
a) Information on fees charged by the most representative services. This information must be a separate, complete, up-to-date, clear and accurate document with legible handwriting and with a presentation that is easy to read.
This information should be made available to anyone interested at any time, at service counters and on the internet. Before the consumer signs a contract for a payment account, this information must be made available to the consumer sufficiently in advance to enable him to analyse it.
When a payment account has an associated service package, the information document must indicate:
- the fees charged for the full package
- the services included in this package and their quantity
- the fees for services that exceed the amount included in the package.
When the payment account is part of a service package, the information document must indicate:
- if it is possible to have the same account outside of that package
- the fees charged for each separate service.
b) A glossary explaining to consumers the meaning of the words they use. The language used in this glossary should be clear. It should not be technical or confusing, and should not lead to misinterpretation. The glossary should be available on the customer service desk and on the Internet.
c) A statement of fees — a list of all fees charged to the consumer over the previous year. The statement should be made available in January. It must be a complete, clear and accurate document, with legible handwriting and with a presentation that is easy to read.
The statement should contain at least the following information:
- the fee for each service and the number of times the service was used
- the fee charged for a package — if the services are associated with a package — and the number of times that fee was charged
- the fee charged for services that exceed the amount included in the package
- the total amount of charged fees, and the total amount charged for each service, for each package of services, and for any service that exceeds the quantity included in the package
- the interest rates charged and the total charged for the use of the overdraft facility or for the overdraft — the consumer's use of amounts above the balance of their account
- the rate and the total amount of interest paid to the consumer by the service provider.
Consumers only have to request and authorize the account change. This request is made to the service provider of the new account. Then, the service providers of the new account and the existing account perform the account change. This process should not interrupt the services.
Payment-service providers provide the consumer with some information about the account change process, such as:
- the role of each service provider at each stage of the procedure
- the deadlines for completing each stage of the procedure
- the fees they may charge for the proceedings
- the information that the consumer must give to the service providers so they can make the account change
- the ways of resolving possible conflicts concerning the process without going to court.
Service providers provide the necessary information for the change of account free of charge. However, they may charge fees for other tasks associated with the change as long as the value is appropriate to the actual costs of those tasks.
The service provider of an existing account in Portugal has the duty to help the consumer open a payment account in another European Union country. To do this, it must:
- provide the consumer with all the important information to make the change of account
- transfer the money from the current account to the new account
- terminate the existing account if the consumer so wishes, provided that there is no obligation to be fulfilled on the part of the consumer which may prevent such closure.
If any service provider involved in the account change does not comply with any of these rules, it is liable for the damages that the consumer may suffer because of that failure.
To switch accounts, microenterprises benefit from the same rules that apply to consumers. Microenterprises are companies employ fewer than 10 workers and have annual sales of up to 2 million euro or an annual balance sheet of up to 2 million euro.Citizens will have access to more minimal banking services
In particular, citizens with access to minimal banking services will now, throughout the European Union, also be able to make:
- use of ATMs
- deposits, withdrawals, payments of goods and services and transfers to other banks.
Payment-service providers must choose at least two authorized entities to legally resolve conflicts and claims. The Bank of Portugal publicises these entities on its website.
In addition, complaints can be filed at the Bank of Portugal.What are its benefits?
This decree-law is intended to adapt Portuguese law to the European Union's rules in order to:
- increase transparency regarding fees charged on payment accounts
- stimulate European consumers' mobility by facilitating the change of payment accounts in Portugal and within the European Union
- increase the number of minimal banking services accessible to citizens
- make the resolution of legal disputes and complaints regarding payment accounts more effective.
This decree-law comes into effect on 1 January 2018.
However, Articles 5 to 11 will come into effect on the first day of the ninth month after the delegated act of the European Commission comes into effect, which adopts the regulatory technical standards for standardized terminology.
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