It's important for all businesses and self-employed people to be familiar with bank charges. What are bank charges? How can they be refunded? How can they be avoided? You'll find the answers to these questions in the following article, which outlines the main bank charges in France, the legislation introducing caps on them and how to limit them.

What's in this article?

• What are bank charges?
  
• What are the main categories of bank charges?
  
• What types of banking services accrue charges?
  
• What fees are charged for payment issues and account irregularities?
  
• Are there any caps on bank charges?
  
• Are charges obvious?
  
• Can bank charges be refunded?
  
• How can bank charges be limited?
  

What are bank charges?

Bank charges cover all amounts charged by French banks to their customers. Charges can either be recurring (monthly or annual) or occasional (due to exceptional circumstances, such as payment issues).

What are the main categories of bank charges?

According to the shared platform Assurance Banque Epargne Info Service (ABEIS), the two categories of fees commonly charged by French banks are those related to:

• The provision of a service or product
  
• Payment issues and bank account irregularities
  

What types of banking services accrue charges?

Most traditional banks in France charge account maintenance fees to ensure the smooth running of bank accounts.

Banks can also charge for issuing a bank card, subscribing to remote banking services, subscribing to alerts, withdrawing cash from a cash machine belonging to another bank, sending a cheque book, issuing a bank draft and purchasing insurance.

Charges can also be incurred for withdrawing cash from a cash machine and using a bank card abroad, depending on the bank card and bank. According to Orange Bank, the fee for withdrawals outside the eurozone can be up to 4% of the amount. Similarly, the fee for using a bank card abroad can be up to 3% of the amount spent.

Finally, French banks can charge transfer and direct debit fees (especially outside the Single Euro Payments Area, or SEPA), as well as foreign exchange fees for international transactions.

Note that some banks do not charge for the above services, while others offer bank cards with free access.

What fees are charged for payment issues and account irregularities?

Intervention fees are charged when a bank has to take action on a bank account due to a payment issue caused by a customer. For example, if someone exceeds their authorised overdraft limit, they risk paying intervention fees.

In addition, if the bank rejects a cheque, transfer or direct debit (e.g. if an account does not have sufficient funds to cover a purchase), then this is considered to be a payment issue. The bank can therefore charge a dishonour or payment default fee.

Banks can also charge fees in the event of a third-party administrative seizure (SATD).

Note that customers with more than five irregularities or issues per month are considered to be in a vulnerable banking situation.

Are there any caps on bank charges?

Each bank is free to set its own rates. However, some charges are capped by French law – this applies to intervention fees, dishonour fees and fees for an SATD.

According to Decree no. 2013-931 of 17 October 2013, intervention fees are legally capped at €8 per transaction and €80 per month, or €4 per transaction and €20 per month for financially vulnerable people who are entitled to the special offer for vulnerable customers (OCF). For financially vulnerable people who have not opted into this offer, the cap is set at €25 per month.

The caps for dishonour fees resulting from payment issues are established by Decree no. 2007-1611 of 15 November 2007, as amended. The maximum fees vary according to the amount and the payment method:

• €30 for the rejection of a cheque for an amount equal to or less than €50
  
• €50 for the rejection of a cheque for an amount greater than €50
  
• €20 for an incident resulting from a direct debit or transfer
  

Finally, third-party notice (ATD) fees are capped at 10% of the amount due or up to €100 per transaction.

Are charges obvious?

Customers can see whether they are being charged bank fees by checking their statement or the bank's list of fees, which is available at branches and online. Only fees that are listed in the list of fees may be charged.

Alternatively, customers can contact their bank directly or sign up for bank alerts by text message, email or post.

Can bank charges be refunded?

If any of the fees charged by the bank seem excessive or abnormal, customers can negotiate with their bank advisor, send a letter to their bank and request a refund, or refer the matter to the bank's ombudsman. As a last resort, they can take their case to the local court. However, they should note that this can be very costly and is only recommended in cases involving large sums of money.

How can bank charges be limited?

To reduce or eliminate bank charges, it's important for customers to research the bank offers available on the market, so they can choose the best bank for their needs.

If they can't afford monthly or annual fees, they should consider an online bank or a no-fee bank account. Most traditional banks in France charge account maintenance fees, while some online banks offer this service free of charge. It is possible to compare the bank rates of all French banks using the tool provided by the French Consultative Committee for the Financial Sector (CCSF).

It's also possible for customers to negotiate reduced charges with their bank, depending on their financial profile.

Alternatively, Stripe offers a variety of banking services to businesses. With Stripe Issuing, it is possible to create, issue and distribute customised bank cards to customers. You can also personalise bank cards with your branding and set your own spending limits. Get started with Stripe to improve your banking experience and keep costs down.