RAISING STANDARDS IN EC CREDIT TRANSFERS

British tourists, out of cash while on holiday in Europe, will enjoy raised standards of service if they need to have money sent to them, following proposals published in a Treasury consultation document today.

The document sets out proposals for implementing the EC Cross Border Credit Transfers Directive. Cross-border credit transfers are the modern way to send money abroad, replacing the more traditional methods of bankers drafts and cheques.

The proposals aim to ensure that individuals and business receive minimum standards from banks or other institutions transferring money between Member States.

The Directive aims to raise standards throughout the EU, for transfers up to 50,000 ecu (about 30,000 Pounds). It covers:

customer information on delivery times and prices;
compensation for late delivery;
prohibition for double charging;
money back guarantee for failure to deliver; and
complaints procedures.

Commenting on the proposals, Economic Secretary Helen Liddell said:

"Banks in all countries need to work to the same standards in order to satisfy their customers. Implementation of this Directive will help us achieve this.

"Small firms and individuals will find these proposals very useful. It will take the worry out of travelling abroad, and those in sudden difficulty will have cause to welcome these proposals."

The consultation period will last for six months.

NOTES TO EDITORS

1. A summary of the EC Directive is attached.

2. Media copies of the consultation document are available from the Treasury Press Office on 0171 270 5185.

3. Non-media copies are available from Mary Gillespie at the Treasury on 0171 270 6978.

4. EC Directive 97/5 on Cross Border Credit Transfers came into force on 14 February 1997 and must be implemented by Member States no later than 14 August 1999.

5. If you have access to the Internet you can find this news release and other Treasury material on this site.

SUMMARY OF THE DIRECTIVE

The Directive lays down minimum standards of service for cross-border credit transfers, which are unconditional payment orders originated by customers of banks or other
service providers. This is an increasingly popular way of transferring money abroad, taking the place of more traditional methods, such as bankers drafts or cheques. The
Directive aims to ensure that banks or other institutions transferring 50,000 ecu or less between member states meet the following requirements:

customers must be provided with information before a transaction, on the time to be taken, the basis of commission or charges, exchange rate and redress procedures (Article 3) plus, following a transaction, a reference allowing identification of a transfer and the total charges (Article 4);
transfers must be credited to the beneficiary's account within six working days, unless the originator and her/his bank specifically agree another timescale (Articles 5 and 6.1);
interest is paid by the originator's bank if the transfer takes longer than six working days or the agreed alternative timescale (Article 6.2);
all charges for the transfer will be paid by the originator to her/his bank, and the beneficiary's bank cannot deduct charges from the money transferred, unless the originator has specifically indicated that charges should be shared with the beneficiary (Article 7.1);
if double-charging does occur, the originator's bank will have to reimburse the beneficiary or the originator any sum wrongly deducted, or the beneficiary bank will have to reimburse the excess fees to the beneficiary (Articles 7.2 and 7.3);
if transfers fail to reach the beneficiary's bank, the originator must be reimbursed in full up to a ceiling of 12,500 ecu, within 14 days of the customer's request, with repayment of charges and fees, plus interest (Article 8);

Institutions are to be released from their obligations under the Directive, in cases of "force majeure" (Article 9).

Member states must ensure that there are adequate and effective complaints and redress procedures for the settlement of disputes (Article 10).

The Directive entered into force on 14 February 1997 and is to be implemented no later than 14 August 1999 (Articles 11-14).

Press Notices 1997 July to December Index