Doubts over ‘cheap’ bank charges

CONSUMER organisations have raised doubts over claims by the Irish Bankers’ Federation that the cost of banking in Ireland is competitive by European standards.

The IBF yesterday defended fees charged by the country’s five main banks based on the results of new independent research.

According to the study, the cost of operating a current account and servicing a mortgage in Ireland are below the European average.

The survey of bank charges in 13 countries across Europe also reveals that the cost of personal term loans and credit cards here are marginally above the average.

Nevertheless, the latest Consumer Price Index reveals that the cost of financial services in Ireland has risen by over 23% in the past 12 months, although much of the increase is attributed to hikes in Government stamp duty.

Critics have also questioned the reliability of the IBF data, which did not examine bank charges in many euro zone countries while incorporating figures for Britain and Norway, which operate different interest rates to the ECB.

A BEUC spokesman, the European Consumers’ Organisation, said the results had to be treated with some degree of scepticism because of the difficulty in comparing “like with like” Consumers’ Association of Ireland chief executive Dermott Jewell said the report omitted many aspects of bank charges.

“It does not address the high interest on credit cards or the lack of interest on credit balances,” he said.

The survey found that Irish bank charges are:

Fourth cheapest of eight countries for current accounts.

Fifth cheapest of nine countries for personal term loans.

Fourth cheapest of eight countries for credit cards.

Third cheapest of nine countries for home mortgages.

Jim Bardon, IBF’s director general, said the results indicated that bank charges in Ireland were at the cheaper end of the European cost league.