How do you navigate the jungle of bank charges? What protection is there for vulnerable customers? Under pressure from regulators and consumer associations, the French banking sector has developed a vast body of rules of good conduct. These professional standards, which are often ignored by the general public, nonetheless constitute an essential protective framework to ensure the protection of vulnerable customers. protecting customers from their bank.
1. Transparency and public information
One of the main thrusts of the changes in ethics is to improve transparency and the information provided to retail customers.
Harmonisation of banking terms
Banking jargon can seem impenetrable. To remedy this opacity, the banks have adopted a set of standardised banking terms. In concrete terms, a list of frequent transactions has been drawn up with standardised definitions, validated by the Comité Consultatif du Secteur Financier (CCSF). This approach was reinforced by the decree of 5 September 2018, which updated the list of common names for the main bank charges, in accordance with article D.312-1-1 of the Monetary and Financial Code. This standardisation finally allows consumers to compare offers without getting lost in a deliberately obscure vocabulary.
Standardised price brochures
Another significant advance is that banks' price brochures now follow a standard summary and present a "standard extract of prices". This document, placed at the top of price brochures, lists current banking services and their charges. This standard has been the subject of a code of conduct approved by the Autorité de contrôle prudentiel et de résolution (ACPR). An order dated 5 September 2018 introduced the requirement for a standardised "tariff information document", available both online and in branches. As this text states, "It is provided free of charge, on paper or on another durable medium, to any consumer who requests it."
Statements of bank charges
Since June 2011, monthly account statements have had to show the total bank charges levied the previous month. Since January 2016, article L.312-1-5 of the French Monetary and Financial Code has also required that charges relating to irregularities and incidents may not be deducted until at least 14 days after the statement date. Article R.312-1-2 of the same code sets out the precise list of charges covered by this obligation to provide information, including, in particular, intervention [commissions](cite: 1731), rejection fees, card stop fees, etc.
2. Protecting customers in vulnerable situations
An important part of these rules of good conduct for private individuals concerns the enhanced protection of customers considered to be financially vulnerable.
The right to a bank account and basic banking services
Access to banking services has become essential in our society. Article L.312-1 of the French Monetary and Financial Code enshrines a genuine right to an account, reinforced by a "Banking Accessibility Charter" approved by ministerial decree on 18 December 2008. This charter requires banks to issue a letter of refusal immediately if an account is not opened, and to inform customers of their right to ask the Banque de France to designate an institution to open an account for them. Banks must even offer to take this step on the customer's behalf. The basic banking service, the content of which is strictly defined by decree, provides access to essential banking services free of charge.
Special offer for vulnerable customers
Article L.312-1-3 of the French Monetary and Financial Code requires banks to offer people in financial difficulty a specific package that includes suitable payment methods and limited incident charges. These [packages](cite: 1640) aim to better control the spending of the most vulnerable people. The decree of 30 June 2014 specifies the criteria for detecting vulnerable populations and the content of this offer. Its price cannot exceed €3 per month (amount revalued annually according to the INSEE index). The conditions for identifying vulnerable customers are detailed in article R.312-4-3 of the Monetary and Financial Code, including in particular situations of registration with the FICP, over-indebtedness, or cases of modest income combined with repeated payment incidents.
Ceiling on incident charges
In September 2018, banks made a commitment to cap bank incident charges for their vulnerable customers:
- 25 per month for all customers in financial difficulty
- 20 per month and €200 per year for customers who have subscribed to the special offer
The French Banking Federation (FBF) published a professional good practice in December 2018 to harmonise these practices. The Banking Inclusion Observatory noted in its 2018 report that "for the 3.4 million bank customers identified as being in a situation of financial fragility at the end of 2018, the maximum €25 per month cap on bank incident charges has been applied".
3. Rules relating to means of payment
Banking ethics also seek to regulate the use of means of payment in order to protect consumers.
Alternative payment methods to cheques
For customers who are banned from banking or wish to avoid the risks associated with using cheques, banks offer "alternative payment plans" ([GPA](cite: 1702)). These offers must include a balance alert system. Current regulations, set out in article R.312-4-3 of the French Monetary and Financial Code, stipulate that this offer must include :
- A systematic authorisation card
- Four monthly SEPA transfers (including one standing order)
- Unlimited direct debits
- Two bank cheques per month
- A balance alert system
This offer has been available since October 2014, meeting the needs of customers looking for security in their payment transactions.
Limits on intervention fees
Intervention fees represented a financial drain for some customers. The law of 26 July 2013 imposed a cap on them. Since January 2014, these charges may not exceed :
- 8 per transaction and €80 per month for ordinary customers
- 4 per transaction and €20 per month for vulnerable customers
These ceilings are defined in article R.312-4-1 of the French Monetary and Financial Code, representing a significant reduction in the charges borne by customers in difficulty.
Local transfer
Credit institutions are committed to developing more modern and accessible means of payment. One of these is the "local transfer", an alternative to cheques for everyday payments. This service makes it possible to transfer money from a cash dispenser or mobile phone to friends or family, or to pay for a purchase. This initiative is part of a wider drive to reduce the use of cheques, a means of payment that is often prone to incidents.
4. Credit and savings rules
Credit](cite: 1743) and savings are also subject to specific ethical rules designed to protect consumers.
Variable-rate loans
Variable-rate loans can present significant risks for borrowers. In 2008, the Fédération Bancaire Française and the Association Française des Sociétés Financières made twelve commitments to better protect their customers. These commitments include:
- Systematic presentation of a fixed-rate alternative
- Elimination of call rates
- Standard simulations provided as soon as the loan application is submitted
- More information on the conditions for switching to a fixed rate
- Drawing up a common glossary
A glossary of variable-rate mortgages has been drawn up to make it easier to understand the technical terms used in the contracts, reinforcing the protection for property borrowers.
Distribution of People's Savings Plans
The Association Française des Établissements de Crédit has drawn up a code of conduct for the distribution of PEP savings plans. Institutions undertake to :
- Not automatically transfer funds to PEPs without the customer's prior consent
- Specify the amount of remuneration and expenses in advertising materials
- Clearly state exit conditions and penalty amounts in contractual documents
Access to credit for people at increased risk (AERAS)
Access to credit can be difficult for people with health problems. The AERAS agreement (s'Assurer et Emprunter avec un Risque Aggravé de Santé), which came into force in January 2007, facilitates access to insurance and credit for these people. This agreement was strengthened by a rider dated 2 September 2015 introducing a "right to be forgotten" for certain diseases such as cancer: "under certain conditions, a former cancer may not be declared". A reference grid also lists the illnesses for which people can take out insurance without additional premium or exclusion after certain time limits. The law of 31 January 2007 enshrined the main principles of this agreement in the Public Health Code, reinforcing its legal scope.
5. Banking mobility
Making it easier to change banks ([mobility](cite: 1756)) is another area of consumer protection. Industry standards, adopted in 2008 and strengthened since, aim to simplify this process. At the customer's request, the new bank will take care of the administrative formalities involved in changing the direct debit address for recurring credit transfers and direct debits. The old bank must close the account within 10 working days. Despite these commitments, practical difficulties sometimes remain.
If you are experiencing difficulties with your bank or feel that your rights have not been respected, a lawyer with expertise in banking law can analyse your situation and advise you on the steps to take.
Sources
- Monetary and Financial Code, articles L.312-1, L.312-1-1, L.312-1-3, L.312-1-5, R.312-1-1, R.312-1-2, R.312-4-1, R.312-4-3
- Order of 5 September 2018 setting the terms and conditions for informing customers and the public about the general terms and conditions and charges applicable to transactions relating to the management of a deposit account
- Decree no. 2018-774 of 5 September 2018 amending article D.312-1-1 of the Monetary and Financial Code.
- ACPR Decision No. 2013-C-35 of 24 June 2013 approving the code of conduct "Presentation of banks' price brochures".
- Law 2013-672 of 26 July 2013 on the separation and regulation of banking activities
- Decree no. 2014-738 of 30 June 2014 on the specific offer to limit charges in the event of an incident
- Annual report 2018 of the Banking Inclusion Observatory AERAS agreement of 6 July 2006 and its rider of 2 September 2015 on the "right to be forgotten"
- Law no. 2007-131 of 31 January 2007 on access to credit for people with an aggravated health risk
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