As of today, further regulations for assisting the switching of bank accounts come into effect as part of the so-called law on payment accounts. These provisions enable consumers to switch more easily between current accounts and constitute a further legislative initiative besides the recently introduced “Basic bank account". The following aspects are essential:
- From now on consumers are legally entitled that the former and the new bank cooperate when switching bank accounts. This also holds when consumers switch accounts online.
- This cooperation between providers mainly refers to the exchange of information relevant to the switching. For instance, consumers can grant permission for the new provider to inform former and ongoing payment recipients such as landlords, insurances as well as energy- or telecommunication suppliers about the new account connection.
- Moreover, all European member states have to implement these provisions for payment accounts as of now, which further helps to facilitate account openings across the EU.
Gerd Billen, state secretary in the German Federal Ministry for Justice and Consumer Protection, commented as follows: “With this part of the payment account law coming into force, we make the switching between different bank institutes substantially easier. At the same time this service increases competition among banks. More competition, more advantages for customers. From the perspective of consumer protection, we have created the best conditions for this setting."
Source: German Federal Ministry for Justice and Consumer Protection