AGREEMENT BETWEEN THE BANKS – MEMBERS OF THE ABB FOR PERSONAL CURRENT ACCOUNTS SWITCHING
Preamble: On the grounds of the developed by the European Banking Industry Committee (EBIC) common standards for the role of banks in supporting domestic current account switching, called “Common Principles on Bank Account Switching”, banks in Bulgaria agreed to implement and observe the rules that are included in the current agreement.
I. Scope
1. The current rules apply only to the personal current accounts linked to recurring direct debits, orders for recurring credit transfers and incoming recurring credit transfers.
2. The rules do not apply to:
- current accounts from which payments on loans are made;
- current accounts linked to an agreed loan in the form of overdraft or current accounts linked to credit cards;
- current accounts linked to investment services;
- current accounts on which there are pledges or blocked balances;
- current accounts on which a garnishment is imposed.
3. The rules are not applied to branches of banks, licensed by the BNB for performing banking activities, operating in the EU member-states or in third countries in accordance with the provisions set in the Law on Credit Institutions (branches of Bulgarian banks abroad).
ІІ. Definitions
4. Switching Current account switching means providing a possibility for the client to change without any obstacles, easily and quickly the bank, where he/she has a current account used for payments in the form of direct debits, orders for credit transfers and for receiving credit transfers, by opening an account in another bank where to transfer the above mentioned payments or to use for that purpose an already opened (existing) current account in another bank.
5. "New" bank This is the bank, where the client has chosen to open a current account or the client has already opened such an account, where he/she wants to transfer all or a part of his/her recurring payments as direct debits (e.g. utility bills, insurance and others), orders for credit transfers and to receive on that account incoming recurring credit transfers (e.g. salaries, social security payments, rents, etc.)
6. "Former" bank This is the bank where the client has a current account, used for recurring payments as direct debits, orders for credit transfer and for receiving incoming credit transfers, which he/she wants to transfer to another account in another bank.
7. Primary contact point In the process of switching the client may choose to contact only with the "new" bank. In that case the "new" bank is called Primary contact point.
8. Client By the meaning of the current agreement the client is a natural person who is a party to a current account agreement and in the relations with the "new" and the "former" bank during the process of switching is acting outside his/her professional or trade activity.
9. Date of switching For the purpose of the current agreement the date of switching is that date, since when the "former" bank stops and the "new" bank starts performing payments in accordance with the client’s instructions to the respective account that is placed at it.
ІІІ. Operation of the Agreement
10. The agreement enters into force on the 1st of November 2009
ІV. Banks’ Obligations for Providing Practical Instructions (Information) for Switching
11. On the grounds of the current agreement banks in Bulgaria work out practical instructions (information) for switching, which they publish on their Internet sites and give them to the clients on a durable medium. The practical instructions include information on the responsibilities of the "new" bank, the "former" bank and the client as well as on the timescales and the fees connected with the switching process.
V. Rights and Obligations of the "New" Bank
12. On the client’s request the "new" bank opens an account in accordance with the established rules.
13. The "New" bank provides the client with practical instructions (information) for switching together with standardized forms for that process. The bank gives the client a Request for Switching in a standardized form (Annex №1), assists him/her to fill it in by providing information on the possibilities for payments switching from the current account at the "former" bank to the current account at the "new" bank. If the client wants to close the account at the "former" bank, he/she fills in the respective part of the Request for Switching.
14. The "new" bank advises the client to choose such a date in the month/ to choose such a period in the month when not many payments are expected. The client points out the preferred date in the Request for Switching. Additionally, the bank informs the client when it is going to be able to execute the payments that the client wants to switch to the newly opened account or to an already existing account in the bank.
15. In case the client wants to choose the "new" bank as a Primary contact point, that bank sends the Request for Switching filled by the client with his/her notarized signature to the contact persons as in item 40 at the "former" bank with a deadline not later than two working days after its receiving.
16. The "new" bank contacts the "former" bank (by the contact persons as in item 40 in the current agreement) but not later until the end of the second working day from receiving the Request for Switching in order to specify the date for switching and if the "former" bank considers that the circumstances for switching are available according to the current agreement.
17. The "new" bank assists the client to inform the creditors in direct debits, for instance by providing copies of letters of notification.
18. The "new" bank also assists the client in providing the data for his/her "new" account to third parties, more concretely to those, from which he/she receives recurring credit transfers (employers, social services (the National Social Security Institute) and others).
19. In accordance with the already specified date for switching and on the grounds of the Request for Switching as well as the List with Payments Declared for Switching to the Account at the "new" Bank, received from the "former" bank and confirmed by the client, the "new" bank starts executing outgoing recurring credit transfers and orders for recurring direct debits as the deadline for this should be not more than 7 working days after receiving the all the relevant information on the payments from the "former" bank or from the client. If necessary, additional information shall be provided by the client.
VІ. Rights and Obligations of the "Former" Bank
The "former" bank can receive a copy of the fulfilled by the client Request for Switching from him/her or the "new" bank.
21. On the basis of the received Request for Switching the "former" bank grants the client or the "new" bank - in case the client has chosen the "new" bank as a Primary Contact Point, detailed and thorough information, which is at its disposal, on the client’s mandates for direct debit and orders for outgoing recurring credit transfers.
22. The information that the "former" bank provides as defined in item 21 is in accordance with the Request for Switching. The "former" bank provides information in the form of List with Payments Declared for Transferring to the Account at the "new" Bank – Annex №2 to the current Agreement with a deadline not longer than 7 working days after receiving the Request for Switching from the client or from the "new" bank. When the "new" bank is chosen as a Primary Contact Point, a copy of information is provided to the client too.
23. In case the "former" bank considers that switching is not possible (the account is outside the scope of the current agreement or due to other reasons), the "former" bank notifies the client, respectively the "new" bank as it points out the reasons for this in terms not later than the deadline as defined in item 22.
24. As of the date for switching (item 9 of the agreement), the "former" bank stops executing client’s recurring direct debits as well as credit transfers ordered by the client.
25. After finishing the steps of switching, described above and at the declared request by the client for closing the account in the respective part of the Request for Switching, the "former" bank transfers the available balance to the client’s account in the "new" bank, in case there is such balance and closes the account that is placed at it.
26. The "former" bank has the right not to close the account if it is with a negative balance, if there are unturned payment cards as well as other unsettled relations between the client and the bank linked to the account. In these cases despite the choice of the "new" bank as a Primary contact point, the "former" bank may contact the client directly in order to end the existing unsettled issues.
27. In case the order for closing the account is submitted through the "new" bank, when it is chosen as a Primary contact point, the "former" bank may notify the client for the necessary steps that should be undertaken before transferring the balance from the client’s account at the "former" bank to the account at the "new" bank as well as for closing the account at the "former" bank.
VІІ.Relations between the Different Parties in the Switching Process
After receiving the Request for Switching from the client and in compliance with the indicated date for switching and by keeping to the deadlines and conditions in the current Agreement, the "former" bank and the "new" bank, according to their technical opportunities, the contractual relations with third parties, linked with the switching process (heating companies, electricity companies, water supply companies, etc.), the legal circumstances and the banking practice, specify the date for switching for which they consult with the client.
29. The possible deadline for closing the account at the "former" bank is also specified in the same order, if the client has declared such a will.
30. The exchange of information, documents and notifications during the switching between the banks is done in a way agreed by the both banks, as the preference of the "former" bank is leading.
VІІІ. Fees
31. The "former" bank cannot apply fees for closing the account placed at it, except the case when that account is opened within a period less than 12 months.
32. The client does not pay fees for the information provided on: the necessary steps for switching, possible actions undertaken from the "former" bank and the "new" bank, the time necessary for the switching process and probable fees as well as for the information on the recurring direct debits and incoming recurring credit transfers, provided by the ""former"" bank, if that information is available through an automated process at the "former" bank and does not reach back more than 13 months.
33. Fees for other services, provided by the bank to the client and related to switching, should be appropriate and in lines with costs. The client should be notified in advance on the bank’s charges due.
ІX. Guarantees for Correct Execution of the Obligations in the Current Agreement
Clients do not pay any fees imposed by the banks as a result of the banks’ own errors during the switching.
35. The switching process should not be subject to any unjustified delay due to banks.
36. In case of a bank that have joined to the current Agreement and breaks the rules set in it or does not follow them strictly, the Executive Board of the ABB may take a decision to turn to the respective bank and to ask for an explanation for the non-compliance with the rules, and in case of a continuous non-observation of them, the ABB may inform the rest of its members for that as well as for the undertaken action on that issue.
37. Banks are obliged to observe the current Agreement since the date of its entering into force, as defined in item 10 in the Agreement, by ensuring the readiness for its application within the period until its starting deadline.
38. Banks should apply the current Agreement by considering the Law on Payment Services and Payment Systems as well as other applicable legal acts in the country, including the Law on Measures against Money Laundering as in case of contradictions with the respective legal acts, the legal requirements should be followed in preference.
39. Clients could make complaints for non-observation of the current Agreement by the banks addressing the existing rules for out-of-court settlement of payment disputes.
X. Role of the Association of Banks in Bulgaria
40. In order to facilitate the switching process banks should point out at least two contact persons, for whose names and contact details the ABB is notified. The banks also declare before the ABB the preferred way for the exchange of information in accordance with item 30 from the current Agreement. On the basis of this data, received from the banks, the ABB Secretariat makes and maintains an updated list of the contact persons, which also includes the declared by each bank preferred way for exchange of information. This information is circulated to all banks in order to be used in their relations in the switching process.
41. The ABB provides information and methodological assistance to the banks in the performance of their duties in accordance with the Agreement, e.g. the ABB may elaborate a recommendation model of instructions as in item 11 in the Agreement.
The ABB informs the organizations for consumer protection for the existence of the Agreement and for the banks that have adhered to it. The ABB also maintains updated information on its Internet site.
XI. Monitoring
43. The ABB agrees the current Agreement with the BNB and with the Commission for Consumer Protection for compliance with the Common Principle of EBIC.
