In Luxembourg, banks close bank accounts without justification

In Luxembourg, banks close bank accounts without justification
In Luxembourg, banks close bank accounts without justification

“Dear customer, after careful review of our service offering, we have regretfully decided to close your accounts, including your Visa account, very soon.” This is the message that a client of one of the largest Luxembourg banking institutions saw displayed on his banking application one morning, without notice.

“When we call them, they say it’s following a change in strategy, but don’t say more. Basically, from what we understand, apart from customers who have astronomical sums in their account, we no longer want other customers since they do not offer any alternative solution within their bank,” fumes a resident, including the parents have just been notified of the loss of their bank account.

This was my main account into which income was paid each month and from which all my transactions were carried out

A concerned customer

“In my case, as in the others, it was my main account into which income was paid each month and from which all my transactions were carried out,” testifies another Luxembourg resident concerned.

Complaints

If the distress of these customers is real, the Luxembourg banks are nevertheless within their rights. The latter can unilaterally choose to close the bank account of a client, even an old one, without any justification.

The Luxembourg Consumers’ Union (ULC) knows this situation well. The association receives “from time to time” complaints regarding account closures by banking entities.

There is a commercial relationship between the bank and the client and the bank may decide to terminate this relationship, without justification.

Ben Walisch

specialist in the disputes department of the Luxembourg Consumers’ Union

“There are cases of elderly people who have had this bank account for years and the bank decided to close it without explaining the reason,” explains Ben Walisch, specialist in the disputes department of the Luxembourg Consumers’ Union.

In his testimony, one of the affected customers said he suspected the bank had decided to close his account because he was not a customer who brought profits to the institution. “I had no debt to the bank,” explains the client. “Customers who had loans did not see their accounts closed by the bank.”

Unprofitable accounts

“There is a commercial relationship between the bank and the client and the bank may decide to terminate this relationship, without justification. But it must notify the customer two months in advance, either by letter or by email,” explains Ben Walisch.

Even if the customer has an account at the bank where he receives his monthly salary and where transactions are frequent, this account alone may not be of interest to the bank. If the client only has this account with the institution, but no mortgage or other loans, the bank may consider the banking fees to be low, and close the account, as Ben Walisch explains.

Of course, the customer can choose to have his current account in one bank and other accounts and credits in others. But, knowing this, the bank which holds the current account may consider this contract insufficient to maintain the relationship with the customer.

Each part [banque ou client] may at any time terminate its commercial relations and/or its accounts without having to justify the reasons to the other party.

Some clients may have a bank account that is several years old, as in the case of the elderly clients who complained to the ULC, but if this account is just as simple and does not produce charges and expenses made by clients at the bank, the bank can still close it.

Without justification

In Luxembourg, and according to the general conditions of the banks, “each party [banque ou client] may at any time terminate its commercial relations and/or its accounts without having to justify the reasons to the other party, subject to the specific provisions relating to credits, and subject to prior notice.

If the bank decides to close the account and the client is the consumer, the notice is therefore two months, but if the initiative comes from the client, the notice is one month.

Closure without notice

On the other hand, banks can also close a bank account “immediately” and “without notice” under certain specific conditions. For example, if the customer does not fulfill his legal and contractual obligations towards the bank, if the customer’s solvency is “compromised” and the guarantees requested are insufficient, or if the bank’s reputation is put at risk.

According to the Financial Sector Surveillance Commission (CSSF), consumers can contact this body if they believe that their account “has been unjustifiably closed by the institution concerned”.

The UCL expert, for his part, recalls that in Luxembourg, “everyone has the right to a bank account”.

Therefore, if the account is closed in one bank, by decision of this body, residents can open an account in another bank. In particular, in one of the five banks that the Financial Sector Supervisory Commission brings together. All information is available on the CSSF official website.

This article was originally published on the Contacto website.
Adaptation: Laura Bannier

-

-

PREV VivaTech show: French tech seeks turnover
NEXT Bitcoin on June 10 – 10th consecutive close below $70,000 for BTC