Bank penalty charges in France

Issuing
Issuing

Stripe Issuing āđ€āļ›āđ‡āļ™āļœāļđāđ‰āļĄāļ­āļšāļĢāļ°āļšāļšāļāļēāļĢāđƒāļŦāđ‰āļšāļĢāļīāļāļēāļĢāļ˜āļ™āļēāļ„āļēāļĢāļŠāļģāļŦāļĢāļąāļšāļ˜āļļāļĢāļāļīāļˆāļŠāļ•āļēāļĢāđŒāļ—āļ­āļąāļžāļĢāļđāļ›āđāļšāļšāđƒāļŦāļĄāđˆ āđāļžāļĨāļ•āļŸāļ­āļĢāđŒāļĄāļ—āļĩāđˆāļĨāđ‰āļģāļ™āļ§āļąāļ•āļāļĢāļĢāļĄ āđāļĨāļ°āļ­āļ‡āļ„āđŒāļāļĢāļ—āļĩāđˆāļžāļąāļ’āļ™āļēāļ­āļĒāđˆāļēāļ‡āļ•āđˆāļ­āđ€āļ™āļ·āđˆāļ­āļ‡

āļ”āļđāļ‚āđ‰āļ­āļĄāļđāļĨāđ€āļžāļīāđˆāļĄāđ€āļ•āļīāļĄ 
  1. āļšāļ—āđāļ™āļ°āļ™āļģ
  2. What are penalty charges?
  3. What causes penalty charges to be applied?
  4. What is the difference between penalty charges and interest?
  5. Are penalty charges capped?
  6. Can penalty charges be appealed?
  7. How can penalty charges be avoided?

Whether running a business or self-employed, it is important you fully understand bank charges, including penalty charges. These can mount up quite quickly if you’re not careful. In this article, we’ll take a detailed look at the penalty charges applied by banks, and explain how to avoid them.

What’s in this article?

  • What are penalty charges?
  • What causes penalty charges to be applied?
  • What is the difference between penalty charges and interest?
  • Are penalty charges capped?
  • Can penalty charges be appealed?
  • How can penalty charges be avoided?

What are penalty charges?

Penalty charges are the fees banks collect when they have to take action with a customer’s account if a payment cannot be met or there is some problem with the bank account. Penalty charges cover the bank’s costs.

Penalty charges are one of the 12 types of bank charges that appear on a bank’s summary of standard account fees (you can learn about the main types of bank fees in France in our article on this subject). Every bank is obliged to publish its penalty charges on paper or online.

What causes penalty charges to be applied?

Penalty charges are applied when:

  • You are going overdrawn (meaning there are insufficient funds on your account) with no authorized overdraft and the balance is about to become negative (unauthorized overdraft).
  • You have an authorized overdraft, but a transaction will take you over the authorized limit (going over an authorized overdraft).
  • You arrange a transfer with incorrect bank details, which the bank has to rectify.

Going overdrawn is the most common cause of problems with a bank account.

It is worth noting that under decree no. 2014-739 of June 30, 2014, since January 1, 2016, all banks have been required to notify their customers in advance if they are going to apply a penalty charge, and at least 14 days before debiting the account. Fees are debited the month following the incident.

What is the difference between penalty charges and interest?

If there are insufficient funds, banks might cover the necessary funds but apply account fees or debit interest, as well as a penalty charge for each payment needing to be covered (this cover is similar to a loan).

The penalty charge is a fixed amount charged depending on the number of transactions covered which exceed the overdraft limit during any one month. However, the overdraft fee is a variable amount, calculated as a percentage of the overdraft depending on the bank’s annual percentage rate (APR). Overdraft fees are applied each month or quarter while penalty charges are applied monthly. Penalty charges and overdraft fees can both accrue at the same time.

Are penalty charges capped?

Penalty charges are capped by law. Under decree no. 2013-931 of October 17, 2013, bank charges are legally capped at ₮8 per transaction and ₮80 per month, or ₮4 per transaction and ₮20 per month for anyone who is financially vulnerable and to whom a special arrangement known in France as an OCF applies. The cap is set at ₮25 per month for anyone who is financially vulnerable but to whom this arrangement does not apply. You can learn more about financial vulnerability in the article published by the French government.

Banks are under a strict obligation to publish their penalty charges in the summary of standard account fees, and to respect the legal monthly limits, in order for their charges to be legally compliant. Explore the Ma French Bank standard table of fees (a bank document which includes the information listed in the summary of standard account fees) as an example.

Can penalty charges be appealed?

Provided banks respect the applicable limits and comply with the rates quoted in the summary of fees, they can apply penalty charges in the event of a problem with your bank account. If you feel they are unfair, you can write to the account manager or customer service at the bank asking for a refund. If you are unhappy with the bank’s reply, or if the bank does not reply, you are advised to send a letter to the bank by registered mail. As a last resort, you can contact the banking mediator or go to court.

How can penalty charges be avoided?

Penalty charges can be avoided by monitoring your account balance so you don’t exceed your overdraft limit. You can choose to receive notifications when your balance is getting low or request a card with systematic authorization, which automatically checks your balance before confirming your transactions.

If you have a large payment coming up, always ask your account manager to increase the authorized overdraft limit (you may even be able to negotiate the amount, how long for, and the rate). This will avoid exceeding the overdraft limit when a large payment is due.

You could even opt for a current account with an online bank (such as BforBank, Boursorama Banque, Hello bank, Fortuneo, Orange Bank, N26, Revolut, Nickel, or Ma French Bank), as most do not apply penalty charges. You can compare bank fees for all the French banks using the tool provided by the French Consultative Committee for the Financial Sector (CCSF).

Get started with Stripe to help manage your banking costs. Stripe offers a variety of business banking services, including Stripe Issuing, which allows you to create, issue, and distribute individual payment cards for your customers. You can even personalize these payment cards with your own branding and set spending limits. Sign up with Stripe today and keep your costs under control.

āđ€āļ™āļ·āđ‰āļ­āļŦāļēāđƒāļ™āļšāļ—āļ„āļ§āļēāļĄāļ™āļĩāđ‰āļĄāļĩāđ„āļ§āđ‰āđ€āļžāļ·āđˆāļ­āđƒāļŦāđ‰āļ‚āđ‰āļ­āļĄāļđāļĨāļ—āļąāđˆāļ§āđ„āļ›āđāļĨāļ°āļĄāļĩāļˆāļļāļ”āļ›āļĢāļ°āļŠāļ‡āļ„āđŒāđ€āļžāļ·āđˆāļ­āļāļēāļĢāļĻāļķāļāļĐāļēāđ€āļ—āđˆāļēāļ™āļąāđ‰āļ™ āđ„āļĄāđˆāļ„āļ§āļĢāđƒāļŠāđ‰āđ€āļ›āđ‡āļ™āļ„āđāļēāđāļ™āļ°āļ™āđāļēāļ—āļēāļ‡āļāļŽāļŦāļĄāļēāļĒāļŦāļĢāļ·āļ­āļ āļēāļĐāļĩ Stripe āđ„āļĄāđˆāļĢāļąāļšāļ›āļĢāļ°āļāļąāļ™āļŦāļĢāļ·āļ­āļĢāļąāļšāļ›āļĢāļ°āļāļąāļ™āļ„āļ§āļēāļĄāļ–āļđāļāļ•āđ‰āļ­āļ‡ āļ„āļ§āļēāļĄāļŠāļĄāļšāļđāļĢāļ“āđŒ āļ„āļ§āļēāļĄāđ„āļĄāđˆāđ€āļžāļĩāļĒāļ‡āļžāļ­ āļŦāļĢāļ·āļ­āļ„āļ§āļēāļĄāđ€āļ›āđ‡āļ™āļ›āļąāļˆāļˆāļļāļšāļąāļ™āļ‚āļ­āļ‡āļ‚āđ‰āļ­āļĄāļđāļĨāđƒāļ™āļšāļ—āļ„āļ§āļēāļĄ āļ„āļļāļ“āļ„āļ§āļĢāļ‚āļ­āļ„āđāļēāđāļ™āļ°āļ™āđāļēāļˆāļēāļāļ—āļ™āļēāļĒāļ„āļ§āļēāļĄāļ—āļĩāđˆāļĄāļĩāļ­āđāļēāļ™āļēāļˆāļŦāļĢāļ·āļ­āļ™āļąāļāļšāļąāļāļŠāļĩāļ—āļĩāđˆāđ„āļ”āđ‰āļĢāļąāļšāđƒāļšāļ­āļ™āļļāļāļēāļ•āđƒāļŦāđ‰āļ›āļĢāļ°āļāļ­āļšāļāļīāļˆāļāļēāļĢāđƒāļ™āđ€āļ‚āļ•āļ­āđāļēāļ™āļēāļˆāļĻāļēāļĨāđ€āļžāļ·āđˆāļ­āļĢāļąāļšāļ„āđāļēāđāļ™āļ°āļ™āđāļēāļ—āļĩāđˆāļ•āļĢāļ‡āļāļąāļšāļŠāļ–āļēāļ™āļāļēāļĢāļ“āđŒāļ‚āļ­āļ‡āļ„āļļāļ“

āļŦāļēāļāļžāļĢāđ‰āļ­āļĄāđ€āļĢāļīāđˆāļĄāđƒāļŠāđ‰āļ‡āļēāļ™āđāļĨāđ‰āļ§

āļŠāļĢāđ‰āļēāļ‡āļšāļąāļāļŠāļĩāđāļĨāļ°āđ€āļĢāļīāđˆāļĄāļĢāļąāļšāļāļēāļĢāļŠāļģāļĢāļ°āđ€āļ‡āļīāļ™āđ‚āļ”āļĒāđ„āļĄāđˆāļ•āđ‰āļ­āļ‡āļ—āļģāļŠāļąāļāļāļēāļŦāļĢāļ·āļ­āļĢāļ°āļšāļļāļĢāļēāļĒāļĨāļ°āđ€āļ­āļĩāļĒāļ”āđ€āļāļĩāđˆāļĒāļ§āļāļąāļšāļ˜āļ™āļēāļ„āļēāļĢ āļŦāļĢāļ·āļ­āļ•āļīāļ”āļ•āđˆāļ­āđ€āļĢāļēāđ€āļžāļ·āđˆāļ­āļŠāļĢāđ‰āļēāļ‡āđāļžāđ‡āļāđ€āļāļˆāļ—āļĩāđˆāļ­āļ­āļāđāļšāļšāđ€āļ­āļ‡āļŠāļģāļŦāļĢāļąāļšāļ˜āļļāļĢāļāļīāļˆāļ‚āļ­āļ‡āļ„āļļāļ“
Issuing

Issuing

āļĢāļ°āļšāļšāļāļēāļĢāđƒāļŦāđ‰āļšāļĢāļīāļāļēāļĢāļ˜āļ™āļēāļ„āļēāļĢāļŠāļģāļŦāļĢāļąāļšāļ˜āļļāļĢāļāļīāļˆāļŠāļ•āļēāļĢāđŒāļ—āļ­āļąāļžāļĢāļđāļ›āđāļšāļšāđƒāļŦāļĄāđˆ āđāļžāļĨāļ•āļŸāļ­āļĢāđŒāļĄāļ—āļĩāđˆāļĨāđ‰āļģāļ™āļ§āļąāļ•āļāļĢāļĢāļĄ āđāļĨāļ°āļ­āļ‡āļ„āđŒāļāļĢāļ—āļĩāđˆāļžāļąāļ’āļ™āļēāļ­āļĒāđˆāļēāļ‡āļ•āđˆāļ­āđ€āļ™āļ·āđˆāļ­āļ‡

Stripe Docs āđ€āļāļĩāđˆāļĒāļ§āļāļąāļš Issuing

āļ”āļđāļ§āļīāļ˜āļĩāđƒāļŠāđ‰ Stripe Issuing API āļŠāļĢāđ‰āļēāļ‡ āļˆāļąāļ”āļāļēāļĢ āđāļĨāļ°āđāļˆāļāļˆāđˆāļēāļĒāļšāļąāļ•āļĢāļŠāļģāļĢāļ°āđ€āļ‡āļīāļ™āļŠāļģāļŦāļĢāļąāļšāļ˜āļļāļĢāļāļīāļˆāļ‚āļ­āļ‡āļ„āļļāļ“