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FINANCE

Watchdog slams French banks over ‘sneaky’ fees

France’s biggest consumer watchdog has rounded on French banks for their “sleight of hand” in increasing vague ‘account-keeping’ fees for their customers, it was reported on Thursday.

Watchdog slams French banks over ‘sneaky’ fees
What is your bank charging you in fees? And what services are they providing in return? A consumer watchdog this week slammed French banks for 'sneaky' fees. Photo: State Farm

The consumer rights group UFC-Que Choisir denounced on Wednesday a rising number of French financial institutions for charging their customers increasing amounts under the somewhat mysterious guise of ‘account-keeping’ fees.

“We denounce this hidden inflation practiced by banks via the rolling out of account-keeping fees,” the group said in a statement.

“In the face of this umpteenth piece of sleight of hand, we call on senators to make available everywhere information on every single withdrawal of banking fees,” they added, noting that the French Senate was this week debating a bill on banking.

France’s ‘Observatory on banking charges’ is designed to monitor charges levied by financial institutions, such as for transfers, credit cards, and ATM withdrawals.

However, the body doesn’t keep an eye on account-keeping fees, “whose definition remains vague,” according to UFC-Que Choisir.

The watchdog notes that while most banking fees have risen in line with inflation, 61 out of 105 institutions they studied this month were now using account-keeping fees to bring in revenue “under the radar”, a sharp rise from 39 in 2010.

These ‘hidden’ fees now cost French consumers and average of €22 per year, according to the group.

Furthermore, 81 out of 105 institutions now charge account-keeping fees for inactive accounts, to the tune of €43 per year on average, meaning “it’s twice as expensive to do nothing,” according to UFC-Que Choisir.

French-speaking consumers in France can compare fees between different financial institutions, free of charge, on the website of UFC-Que Choisir, until July 3rd.

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FINANCE

France unveils big-spending budget to tackle Covid-shock and pledges no new taxes

France launched a free-spending budget plan on Monday, saying a fresh spike in new Covid-19 cases justified its unprecedented loosening of the purse strings.

France unveils big-spending budget to tackle Covid-shock and pledges no new taxes
French finance minister Bruno Le Maire. Photo: AFP

After €460 billion of emergency spending this year to save the economy from the virus fallout, the government built its 2021 budget plan around a €100-billion “recovery plan”, first announced this month and partly funded by EU money.

The budget came after France's health services on Saturday reported 14,412 new virus cases over the previous 24 hours – only slightly lower than the record 16,000 registered on both Thursday and Friday.

READ ALSO IN NUMBERS Covid-19 cases, hospitalisations and deaths in France

 

The fresh spike threatens to overwhelm hospitals, health officials warned, while the government imposed fresh curbs to limit the spread of the virus, including on restaurants, bars and sports facilities.

“There is no reason to give up the idea of a recovery just because the health difficulties have re-emerged,” Finance Minister Bruno Le Maire told a news conference.

The spending boost is to help the French economy to rebound strongly next year, by eight percent according to the budget, after crashing by an expected 10 percent this year, Le Maire said.

“We are implementing this recovery fund so it can be used up quickly and have the greatest possible impact on growth,” he said.

But the growth forecast immediately drew criticism from France's high council for public finance, a state body charged with making sure that government budgetary assumptions are realistic.

The growth target was “pro-active”, given the “great uncertainties” weighing on the economic outlook because of the coronavirus, the council said.

It also called on the government to be mindful of public debt which has ballooned since the start of the crisis.

France's annual deficit is estimated at 10.2 percent of GDP this year, and is to come in at 6.7 percent in 2021, the government said.

This compares with a permitted ceiling of three percent for eurozone countries, which the EU has however lifted temporarily as governments grapple with the crisis.

The government has promised that it will not raise taxes to pay for the recovery.

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