The ZKG, which entered into force on 18 June 2016, introduced the right to a basic payment account for all consumers in Germany. Consumers were also given a right to request that their previous bank and the new bank assist them when switching accounts. After conducting a first survey in 2018 (see expert article on the BaFin website dated 16 October 2018), BaFin has now completed a second survey of the most important facts and figures for the European Commission.
Banks continue to meet their obligations
BaFin’s latest survey reveals that a good 1,300 credit institutions in Germany offer basic payment accounts. These are all credit institutions that offer consumer accounts. Almost 761,500 basic payment accounts were opened between the date on which the new rules came into force and 30 June 2020. BaFin found that consumers submitted more than 144,200 applications to open basic payment accounts in 2019. Institutions initially refused just under 5,200 such applications (approx. 3.6%).
If a bank refuses to open a basic payment account, the consumer concerned can apply to BaFin for administrative proceedings to be opened. BaFin will then examine whether the bank was entitled to refuse the consumer’s application which it is allowed to do only under certain strictly defined conditions. These include, for example, if the applicant already has a basic payment account or if the bank violates the due diligence obligations under anti-money laundering law when entering into a business relationship with the applicant. If there are no legal grounds for a refusal, BaFin orders the bank to open the account.
In 2019, 160 consumers filed such applications to BaFin. BaFin was able to effectively help a good 70 of them. It was sufficient for BaFin to request the banks to submit a statement and there was no need to formally order the banks to open a basic payment account. In the other cases, the banks were entitled to refuse the consumer’s application because there were legal grounds for a refusal. In addition, BaFin received roughly 160 complaints in the context of basic payment accounts. The figures show that the banks continue to comply with their obligations under the ZKG.
Assistance in switching accounts works generally well
Banks are also obliged under the ZKG to facilitate account switching for their customers. If requested by the customer, the previous bank must transfer standing orders and other services to the new provider. Both providers concerned must ensure that the required information is shared between them. Consumers took advantage of these rules more than 467,500 times in 2019. They submitted almost 30 complaints to BaFin relating to the account switching assistance stipulated in the ZKG. The number of complaints in relation to the number of accounts switched shows that banks are now effectively meeting their statutory obligations to provide account switching assistance.
Reasonable fees for basic payment accounts
The ZKG sets out detailed rules concerning the obligation to conclude basic payment account contracts, i.e. it defines which obliged entities may or must offer basic payment accounts, who is entitled to such an account and which services the basic payment account must cover. But it does not define how much banks may charge for such accounts or makes specific price specifications. The lawmakers merely set a framework for this. Within this framework, the fees for a basic payment account must be reasonable.
Generally speaking, it is a matter for the civil courts alone to review the reasonableness of fees on a case-by-case basis. They usually perform this task when reviewing the bank’s general terms and conditions.
Federal Court of Justice’s decision
Germany’s highest court of civil and criminal jurisdiction, the Federal Court of Justice (Bundesgerichtshof – BGH), reached a decision regarding the reasonableness of a certain fee model for the first time on 30 June 2020. The court specified in which case a fee for a basic payment account can no longer be deemed appropriate. This is the case when banks allocate the additional work involved with basic payment accounts solely to the holders of these accounts.
In the case in question, the institution had stated that this additional work was allocated exclusively to the basic payment accounts. However, the court argued that these costs must be generated by banks in free competition.
A credit institution which fails to take sufficient account of the statutory requirements for the appropriateness of a fee not only faces having its general terms and conditions reviewed by the civil courts. It is also failing in its duty under the ZKG. As the competent supervisory authority, BaFin can also work towards ensuring that the credit institutions adjust their fee models to the requirements under the ZKG. Often it is sufficient for BaFin to contact the bank concerned and request a statement. However, as a last resort it can also issue orders to punish such contraventions.
BaFin Division for Arbitration, ZKG, SCM, Data Protection Law