The relationship between a bank and its customer is not left to chance. The legislator has put in place a strict legal framework to govern banking practices. Knowing these rules means you can better defend your rights and avoid abuses.
Deposit account agreement
The account agreement became compulsory following Finance Act no. 2004-1484 of 30 December 2004. Article L.312-1-1 of the French Monetary and Financial Code stipulates that "account management for individuals not acting for business purposes is governed by a written agreement between the customer and his credit institution"..
This agreement must contain essential information:
- The duration of the contract
- The products and services on offer and their prices
- How to obtain and use payment instruments
- Opposition procedures
The decree of 8 March 2005 specifies the stipulations that must be included in these agreements.
In the event of a rate change, the bank must inform the customer three months before the new rates are applied. If the customer remains silent for two months, this constitutes acceptance. This period gives you time to compare offers and possibly change bank.
The absence of a written agreement is punishable by a fine of 15,000 euros (article L.351-1 of the CMF), but curiously there are no civil penalties. This legal vacuum sometimes complicates disputes.
The right to a bank account
Everyone has the right to a bank account. This is guaranteed by article L.312-1 of the French Monetary and Financial Code: "any natural or legal person domiciled in France who does not have a deposit account has the right to open such an account with the credit institution of their choice"..
If a bank refuses to open an account, it must provide a certificate of refusal. With this document, you can refer the matter to the Banque de France, which will automatically designate an institution.
This account gives you access to free basic banking services:
- Account management
- One change of address per year
- Bank details
- Collection of cheques and transfers
- A payment card with systematic authorisation
In 2006, following a request from the Prime Minister, the Financial Sector Consultative Committee presented an action plan to strengthen this right. It provides for account activation within 24 hours and widespread access to systematic authorisation cards.
Banking mediation
Banking mediation is a mechanism created by the MURCEF law of 11 December 2001. It enables disputes to be resolved without going to court.
Each bank must appoint an independent and competent mediator. Article L.312-1-3 of the French Monetary and Financial Code states that "Mediators are chosen for their skills and impartiality..
The Ombudsman can be called upon for disputes relating to:
- Opening an account
- Rate changes
- Bundled services with premium
The procedure is free of charge. The mediator must reach a decision within two months. The mediator's proposal is not binding - you retain the right to take your case to court.
Business credit mediation, created during the financial crisis, was made permanent by an agreement signed on 27 July 2009. It helps companies encountering difficulties with their banks in obtaining or maintaining credit.
A national mediator, assisted by local mediators, helps to find solutions. The scheme is regularly renewed - an agreement in March 2013 extended it until the end of 2014.
How to challenge a bank decision effectively
To contest a banking decision:
- Start by sending a registered letter to Customer Services
- If you are not satisfied with the response, contact the Banking Ombudsman
- Specify the subject of the dispute and attach supporting documents
- Set a reasonable response time (15 days)
In certain cases, you can alert the Autorité de contrôle prudentiel et de résolution (ACPR), particularly for breaches of customer protection rules.
For disputes concerning means of payment, article L.133-18 of the CMF requires the bank to reimburse unauthorised transactions immediately.
If the mediator does not resolve the problem, the courts have jurisdiction over banking disputes. A lawyer specialising in banking law will be invaluable. In particular, he will check whether your account agreement complies with legal requirements - a point often overlooked by banks.
The time limits are significant: you generally have 5 years in which to take action against your bank, but only 13 months in which to contest an unauthorised payment transaction.
Sources
- Monetary and Financial Code, articles L.312-1, L.312-1-1, L.312-1-3, L.351-1, L.133-18
- Law no. 2001-1168 of 11 December 2001 (MURCEF)
- Law no. 2004-1484 of 30 December 2004 (Finance Law)
- Order of 8 March 2005 on deposit account agreements
- Market agreement of 27 July 2009 on business credit mediation
- Report of the Comité consultatif du secteur financier of 30 January 2006
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