4. Managing Your French Bank Account
- Cash Withdrawals
- Direct Debits and Standing Orders
- Bank Overdrafts
- Closing/Transferring Account
- Death of Spouse/Partner
- Seizure of Account
4.2. Direct Debits and Standing Orders
It is not difficult to arrange for utility and other regular bills in France to be paid by direct debit or standing order.
Generally speaking, the bank charge for either is negligible or it is free of charge.
A direct debit is called a prélèvement automatique, whilst a standing order is called a virement permanent.
A standing order will be for the same amount and date each period, whilst the amount payable by way of a direct debit may vary each period.
A virement is an order you give your French bank to transfer a specific sum to another bank account.
The other account can be belong to a third party, or another one of your own accounts.
It is called ‘punctual’ or 'occasional' if it is solely for one payment, and ‘automatique', ‘permanent’ or 'régulier' if it is arranged on a recurring basis for a definite or indefinite period.
The date of the payment may be immediate, or for a later date; it is for you to choose.
It is credited to the beneficiary account within one day maximum of the order being received, but up to 4 days elsewhere within the EEA.
You can cancel a virement at any time by simply notifying your bank, excepting those for immediate execution.
Payments may also be made into your bank account from others by this means, such as reimbursement of medical bills from your complementary 'top-up' insurer.
Most banks allow you to set up a virement payment on-line, but you may need to wait several days to allow clearance of the beneficiary, who will need to provide you with their bank account details.
Some readers may also find it useful to reader our newsletter article Instant Money Transfers in France.
The main difference with a virement is that the sum to be deducted is decided by the beneficiary, not the holder of the account.
So there is no indication of the amount to be debited; the sum may vary from payment to payment, such as occurs with a telephone or electricity bill.
There are two approaches to the use of prélévements.
i. Titre interbancaire de paiement (TIP)
If you wish to make a one-off payment by prélévement you will be sent a form to complete by your creditor, called a Titre Interbancaire de Paiement (TIP-SEPA).
The TIP can also be used to put in place a direct debit. The form itself will indicate whether by signing it you are agreeing to set up a direct debit.
The first time you use this form you will need to send it in with a form containing your bank details, called a relevé d'identité bancaire (RIB), and the sum will then be paid by the bank. Several RIBs are included at the rear of your cheque book and you can also ask for some from your bank.
On subsequent occasions, when you receive the TIP, you simply sign it and return it by post to your creditor. So by this means it saves the use of a cheque, but it is not altogether less expensive or easy.
ii. Prélèvement automatique
Alternatively, you can simply give authorisation to the creditor to make a direct debit from your account for each period, as a prélèvement automatique.
You should normally receive a bill from your creditor prior to the direct debit being paid, which then gives you some time to make sure you are happy with it.
Companies and utility agencies frequently have on-line applications forms to set up a prélèvement automatique, with the application then printed off, signed and submitted to them for onward transmission to your bank.
You are not required to use the prélèvement automatique as a method of payment; it is illegal for companies to insist on any method of payment.
Depending on the terms of your bank account, there may or may not be a charge for setting up and processing a prélévement.
Your cheque book will contain several Relevé d'Identité Bancaire (RIBs).
The RIB contains the name of your bank and local branch, the bank code, sort code, account number, the RIB code and the name of account holder.
The RIB is frequently requested by employers, social security agencies, electricity and gas suppliers.
You can ask for more from your bank as necessary.
4.2.3 Cancelling a Direct Debit
There are different procedures in place for cancelling or contesting a prélèvement automatique.
i. Contesting a Forthcoming Debit - If you are not happy with the proposed debit, you need to make an opposition au prélèvement.
You can do this by simply notifying your bank, either by visit, letter or on-line. You also need to write to the creditor, preferably by recorded delivery, stating why you do not accept it.
The bank is required by European regulations to comply with your instructions, as they have a duty of non-interference in your affairs.
However, depending on the terms of your account, there may be charge by the bank for cancelling the payment.
ii. Contesting an Authorised Debit - If you have not been notified in advance of the prélèvement automatique, or it is not in line with your reasonable expectations, then within 8 weeks of the payment you can demand of your bank or creditor to reimburse the sum debited.
You will need to do this in writing. Under European regulations, within 10 days they must reimburse the sum or give written proper reason why they are unwilling to do so.
iii. Cancelling a Debit - If you simply want to cancel a direct debit (révocation d’un prélèvement automatique/mandat), whether or not the sums due under the contract have been fully paid, you are entitled to do so, and there should normally be no charge.
In the case of fraudulent payments or errors made by the bank, you have up to 13 months to contest the payment.
You need to check with your bank the charges that may apply for either of these operations, although most are free of charge.
NB: If you have used your bank card to set up the direct debit neither of these option are available to you.
4.2.4 Cross-Border Payments in Europe
Since 2010 it has been possible to make cross-border payments (including those by credit card) in Europe under what is known as the 'Single Euro Payments Area (SEPA)'.
As SEPA relates to payments in euros; in the case of those making payments from outside of the Eurozone there may to be a currency charge made by your bank.
However, in every other respect the same rules apply in relation to SEPA payments as apply within national borders. So if your bank makes no charge for a direct debit within your home country it cannot make a charge for payment within the EEA. If a charge is made, then it must be the same, up to a maximum transfer of €50,000, beyond which SEPA rules do not apply.
Use of SEPA requires that you have the IBAN (International Bank Account Number) and the BIC (Bank Identifier Code) identification numbers of the account to be paid. This information substitutes for all other information that may previously have been necessary to use when making a bank transfer, whether national or international.
The UK remains in SEPA despite having left the EU.
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