IBAN discrimination: authorities to impose sanctions

The Comité national des paiements scripturaux (CNPS) and the Direction générale de la concurrence, de la consommation et de la répression des fraudes (DGCCRF) will sanction companies and organizations that discriminate against IBANs, by refusing direct debits and credit transfers when the IBAN is not French, but from another European country.

Discrimination mainly aimed at neobank customers

While French banks issue French IBANs, this is not the case for some neobanks. When they are based in other European countries, such as Bunq in the Netherlands, these neobanks issue IBANs whose first two letters correspond to the country in which they are established.

These banks comply with regulations and have the right to export their banking license thanks to their European passport. However, various public and private bodies regularly refuse direct debits and credit transfers to customers of these banks because their IBAN is not French, even though the rates are the same throughout the SEPA zone.

Refusals come, for example, from electricity suppliers, telephone operators, retailers and even employers who refuse to transfer salaries to these bank accounts. Some traditional banks also refuse to make transfers to accounts hosted by neobanks.

These practices, known as IBAN discrimination, have been illegal since the Single Euro Payments Area (SEPA) regulation came into force in 2012.

Article 9 of Regulation (EU) No. 260/2012 is very clear on this point: " All payee payment accounts accessible for a national credit transfer should also be accessible via an EU-wide credit transfer scheme. All payer payment accounts accessible for a national direct debit should also be accessible via an EU-wide direct debit scheme ", he explains in detail.

France leads the way in IBAN discrimination

Since March, the End IBAN Discrimination platform has been receiving reports of IBAN discrimination. It is the result of a joint initiative by N26, Revolut, SumUp, Raisin, Klarna, Starling Bank and Wise.

The data collected in collaboration with the Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (DGCCRF) showed that France had the highest number of IBAN discriminations among the European countries concerned.

42.5% of IBAN discrimination occurs in France. Spain comes second (17%), followed by Germany (14%), Italy (7.5%), Ireland (5%), the Netherlands (4%), Belgium (2%) and Austria (2%). 6% of IBAN discrimination occurs in other European countries.

According to data from the acceptmyiban.org platform, the public sector tops the list of players practicing such discrimination. It is responsible for 26% of cases (notably Health Insurance), followed by financial services (24%), telecoms (20%), insurance (16%), e-tailers (5%), and water and energy suppliers (4%). In 5% of cases, IBAN discrimination is practiced by other players, including employers who refuse to pay salaries when employees' IBAN is not French, but issued by another European country.

On October 8, a new law came into force that may well change all that. Those who persist in discriminatory practices are now liable to fines ranging from 75,000 euros for individuals to 375,000 euros for corporate bodies.

The DGCCRF and CNPS will therefore be imposing financial penalties on the perpetrators of this IBAN discrimination, and are inviting victims of these practices to report them to the SignalConso website, a public service for consumers.