ECONOMY

Greek banks good at giving general info but skimp on details

Greek banks appeared to be much more compliant with ethical code requirements for provision of general information regarding consumer protection for mortgage loans than elsewhere in the European Union, according to a survey coordinated by Germany’s Financial Services Institute (IFF) on behalf of the European Commission. The survey, the results of which were announced yesterday to mark World Consumer Day on Monday, involved 722 branches of banks in 11 EU members which have signed the European Voluntary Behavioral Code, and was conducted in Greece by consumer protection organization EKPOIZO in a random sample of 34 bank branches – 27 in Athens and seven in Lamia – in February and March 2003. Trained EKPOIZO personnel posed as potential customers. At EU level, 53 percent of financial institutions did not provide the relevant general information. Of the rest, 27 supplied it on their own initiative and 20 percent only when asked. In Greece, 73.5 percent of banks complied and 26.5 percent not. However, the information supplied by Greek banks was often found insufficient and not fully in line with the requirements of the code; indeed, in some cases of vital importance for the protection of the borrower, such as regarding the real cost of a loan or early repayment, Greek banks’ compliance rates were two or even three times lower than the EU average. One in three banks at EU level failed to provide individualized written information without which the consumer finds it difficult or is unable to make an informed choice about a financial product. Only one in two supplied the European Form of Standard Information, but in Greece the rate was even lower, 35.7 percent. According to EKPOIZO, Greek banks’ widest divergence from the code’s requirements concerned information on the real cost of mortgages, where 96 percent were found in violation, compared to an EU average of 32.6 percent. They also appeared highly reluctant to adequately describe the available types of loans, with differences between those with fixed and variable rates. The situation in Greece is considered to have improved since last June, when the Bank of Greece issued a regulation resolving many transparency issues in favor of consumers.