Bank account closures: ACPR calls for explanations

In recent weeks, many customers of neobank N26 and online bank ING have been unpleasantly surprised to find that their bank accounts have been closed without prior warning. This week, N26 was called upon to explain this to the ACPR, the French prudential supervisory authority.

ING closes inactive savings accounts

While the reasons that prompted ING's French subsidiary and German neobank N26 to close numerous bank accounts are different, the surprise and discontent among customers is the same.

In the midst of selling off its retail bank in France, Dutch online bank ING has acknowledged that it has closed several thousand Orange savings books since the summer of 2021. According to the France Conso Banque association, more than 300,000 accounts are involved.

According to ING, these account closures, most of which were inactive or had little business, are not related to the current divestment. The online bank justified its decision by a desire to reduce costs, due to the negative interest rates applied by the European Central Bank.

Although the procedure is legal, it has nevertheless aroused the anger of customers. France Conso Banque has set up a defense group, claiming that not all closed accounts were inactive. The consumer protection association is demanding commercial compensation.


Neobank N26 invokes the fight against fraud and money laundering

For neobank N26, which has over 2 million customers in France, hundreds of bank accounts have been closed in recent weeks, usually without notice. A simple notification is sent to customers, who can then no longer access the money in their account.


A number of N26 customers are experiencing difficulties recovering their funds following the closure of their bank account. A consumer group is reportedly about to take legal action.


Summoned to explain its actions before the Autorité de contrôle prudentiel et de résolution, N26 justified the account closures by the fight against fraud and money laundering. The closed accounts were reportedly the result of checks revealing suspicions of money laundering and/or fraud.

According to the neobank, the volume of closures was higher than last year, simply due to a greater number of customers. As for the funds placed in these accounts, according to N26, in 97% of cases they were returned to the main parties concerned without delay.

Last year, German financial regulator BaFin imposed sanctions on neobank N26 for its inadequate risk management. It was ordered to acquire no more than 50,000 new customers per month, and to pay a fine of 4.2 million euros. According to N26, the recent account closures are not linked to the BaFin verdict.


Is the process legal?

The closing of accounts by a bank is a legal procedure, since banks are among the few retail businesses authorized to practice refusal to sell, and to establish criteria enabling them to choose their customers.

As far as notice is concerned, the rules differ depending on the reason for closing the account. For example, if the bank decides to close an account because it is unprofitable, it must inform the customer at least 2 months before closing, in the case of a current account.

On the other hand, as part of the fight against fraud and money laundering, the account can be closed without notice if the bank has any suspicions. Many operations are likely to arouse such suspicions, such as a large transaction, cash movements or a sudden resumption of activity.

In any event, the money in the closed account must be quickly retrievable by the customer, by transferring the balance to a third-party account.