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 Council of the European Union (archives)

More than 1,000 mystery shopper tests were conducted last year across all 27 EU member states, including 30 in Luxembourg. The study was conducted to follow-up on the 2007 European inquiry into retail banking that led an EU-wide self-regulation accord. But the results from last week’s report “show that self-regulation in this case is clearly not delivering the desired results,” the commission said.

Only half of mystery shoppers in the EU 27 said they thought the process of switching their bank account was easy. In the Grand Duchy, that figure dropped to 35 percent, compared with top ranked Hungary (77%) and last place Romania (9%).

None of the Luxembourg mystery shoppers were provided with the informational leaflets required under the self-regulatory code of conduct. In addition, only one of ten mystery shoppers who tried to switch banks was actually successful, nine points lower than the EU average rate, which itself was only 19 percent. In addition, “one of the eight failed switchers waited over 14 working days without a response,” exceeding the timeframe provided for within the self-regulatory regime, the European Commission said.

“The results of the study published today explain why consumers change their banks so rarely,” Michel Barnier, the European internal market commissioner, said in a press statement. “If consumers are not able to easily switch bank accounts, they cannot take advantage of better and cheaper banking services on offer elsewhere.  The single market is thus deprived of the competitive drive that leads to innovation, cost savings and better quality banking services. This, in the long-run, can prove to be an obstacle to growth.”

The European Commission said it is “now assessing possible courses of action to adequately address the shortcomings identified in this study with switching.”