Who has the right to open a payment account with basic features?
The Law of 13 June 2017 on payment accounts introduces a right of access to a basic payment account, and to the services that it must include.
The right to open a basic account applies to anyone residing in the European Union, regardless of their place of residence. This includes asylum seekers and homeless people, as well as people who do not have a residence permit but whose expulsion is made impossible.
Here is the list of institutions in Luxembourg which are required to provide consumers with a basic payment account.
Services included in a basic bank account
The basic account allows you to do the following:
- Pay by card (in the European Union) or online
- Make a transfer, including standing orders
- Transfer funds to a payment account
- Withdraw cash in the European Union, whether at branches or at ATMs
- Open, manage and close the account
The bank may also offer services other than those provided for by law, for example a credit card. These are additional services, subject to bank charges. These services are not compulsory.
When must the bank refuse to open a payement account?
By Law, banks that offer basic payment accounts can refuse an account opening request for the following reasons:
- If the consumer already has a payment account with an establishment located in Luxembourg and allowing him to benefit from the services of the basic payment account.
- If the consumer provides inaccurate or misleading information when requesting to open an account
- If the establishment has reason to suspect that the account will be used for illegal purposes
In case of rejection of a request to open a bank account, the bank informs the person who made the request in writing. This response also contains information on the procedure to be followed to contest the refusal, as well as the right to appeal to the CSSF and the necessary contact details.
May the bank terminate a payment account with basic features?
The bank has the right to terminate the basic account in the following cases:
- The consumer has used the payment account for illegal purposes. In this case, the termination is immediate
- There has been no transaction on the payment account for more than 24 consecutive months
- The consumer has provided incorrect information in order to obtain the payment account with basic functionality, as the correct information would have resulted in the absence of such a right
- The consumer no longer legally resides in the European Union
- The consumer has opened a second payment account in Luxembourg, when he already had one
With the exception of the first case, the bank must respect a minimum notice of two months. It informs the consumer, free of charge, of the reasons for the termination, and indicates the procedure to be followed to contest the termination and refer the matter to the CSSF. To do this, the bank also communicates the contact details of the CSSF.
Information to provide when opening an account
The right to open an account also comes with a duty, that of transmitting correct and complete information to the bank. For any account opening, including a simple basic payment account, the bank must verify a series of information, in particular:
- Identity of the client: surname, first name, nationality, place and date of birth, marital status, domicile, profession
- Origin of the money: what is the activity that generated this money?
- Nature of transactions: who is this money intended for? what amounts are involved?
- Level of risk presented by the client: the employee assesses the level of risk, also relying on automated controls.
Therefor, to open an account, the bank needs the following documents:
- A double-sided copy of your identity card. This must have been issued by a competent public authority and include your photograph.
- Proof of address in your name.
The bank may also request a declaration of honor, where you indicate that you do not have a bank account with another bank located in Luxembourg.
Note that the bank may request other documents, in particular to comply with its obligations in the fight against money laundering and the financing of terrorism.