Banks are not discriminating against foreign-based Swiss clients by charging extra fees, according to the price watchdog. Many Swiss living abroad, however, still feel they are getting a rough deal.
The price watchdog office investigated several complaints about “unfair” banking fees from Swiss citizens living in other countries, but found that the levies were so varied that clients could shop around to avoid them.
A survey of 32 banks found that half did not charge extra fees to overseas clients and that of those that did, the charge varied from SFr48 ($50) to SFr1,200 ($1,250). As this represented ample opportunity for clients to switch banks to avoid extra costs, the watchdog has decided against any action.
“There is no evidence to suggest that the costs for people resident abroad was based on any agreement between banks,” price watchdog chief Stefan Meierhans wrote in his judgment. “It is the responsibility of each individual to find their own solution.”
The picture is muddied by some banks charging different fees according to where clients are resident and others that are contemplating new fee structures in the near future. In addition, some charges are waived depending on the client’s age or the size of their deposited assets.
The Organisation of the Swiss Abroad (OSA) welcomed the investigation, but complained that the situation for Swiss people in the United States and Germany remains dire.
An global crackdown on tax evasion has changed the way Swiss banks do business with clients in other countries. New regulations and the threat of legal action has resulted in accounts being closed down and a ban on new accounts for some foreign-based clients.
In other cases, accounts are only opened if clients can fill them with enough assets to make it worth the while of banks to accept them. All of this makes it difficult, if not impossible, for Swiss citizens living in some countries to shop around for banks that charge less.
The situation is most acute in the US where swissinfo.ch has published complaints from many Swiss citizens who have become innocent victims of the tax evasion dispute.
Clients also complain that banks are also charging higher fees to deal with increasing levels of paperwork and to train staff in new compliance practices. These fees discriminate against holders of small deposits in their homeland, according to Sarah Mastantuoni, head of the OSA legal service.
“Some people have had a simple savings account in Switzerland for years that requires little service from the banks, but still get charged the same as someone holding a portfolio of complex securities,” Mastantuoni told swissinfo.ch.
Both the OSA and the price watchdog fear that the complex legal situation will get worse if withholding tax deals are implemented with Germany, Britain and Austria. The US Foreign Account Tax Compliance Act (Fatca) will also throw up more paperwork and require training once it comes into force.
Only one Swiss bank, the Vaud Cantonal Bank, waives foreign account fees for Swiss citizens living or working abroad. OSA hopes that this model will be adopted by other Swiss banks in future.
“If someone can prove that they have a relationship with Switzerland and can prove tax compliance, then they should be able to open a bank account in Switzerland,” Mastantuoni said.
The price of living abroad
The price watchdog has found that Swiss banks charge varying additional annual fees specifically for Swiss account holders that live abroad.
Of the 32 banks contacted by the price watchdog, the following charge a flat fee:
Valiant SFr1,200 (only charged to account holders resident in the US)
Glarus Cantonal bank: SFr1,000
Credit Suisse: SFr480
Zug Cantonal Bank: SFr420
Schwyz Cantonal Bank: SFr400
Vaud Cantonal Bank: SFr360 (not charged to Swiss nationals living abroad)
Zurich Cantonal Bank: SFr240
Coop Bank: SFr120
Schaffhausen Cantonal Bank: SFr50
Jura Cantonal Bank: SFr48
In addition, Aargau and Basel cantonal banks and Migros bank charge different fees depending on where their clients are resident.
Bern Cantonal Bank and the banking arm of the Post Office (postfinance) plan to introduce charges for foreign clients within the next few months.
Each of the 300 Swiss-based Raiffeisen cooperative bank branches can decide individually which fees they can charge, making it impossible for the price watchdog to come up with a figure.