French Bank Charges for Overdrafts and Transactions
Tuesday 07 May 2019
Banks in France are free to set their own charges, but there are some controls on how far they can go.
Those charges where legal controls that have been imposed concern and charges for refused cheques, direct debits and standing orders, and overdraft fees.
Where irregularities in the running of the account occur these are termed an 'incident de paiement'.
The charges have the general technical term a 'commission d’intervention'.
As a result of relatively recent changes in law, these charges must appear on your account statement, and you must be provided with an annual summary of charges.
A refused cheque is called a 'chèque sans provision'.
Contrary to popular belief, a cheque in France is not equivalent to cash in offering the same guarantee of settlement.
Although on most occasions a bank will honour a cheque you have made out or received, they can refuse to accept it. Of course, if they pay it, they will impose a charge if there are insufficient funds.
The law puts a cap on the charge that can be imposed on cheque you write where there are insufficient funds in your account. It cannot be greater than:
- €30 if the cheque amount is lower than €50;
- €50 if the cheque is greater than €50.
The ceiling includes any letter the bank may send you regarding the cheque. In addition, if the cheque is presented a second time within 30 days the charge cannot again be imposed. It is also irrespective of currency.
Direct Debits/Standing Orders
A direct debit is called a 'prélèvement automatique', whilst a standing order is called a 'virement permanent'.
A refusal to pay is called a rejet de virement/prélèvement
In either case where the bank refuses to honour it, the charge cannot be greater than €20, or lower if the debit is lower.
As with cheques, the bank can only make one charge for the same operation.
An unauthorised overdraft is called a 'dépassement de découvert' or 'découvert non autorisé'.
If you exceed your authorised overdraft then there is a ceiling on the charges that can be imposed:
- €8 for one transaction;
- €80 per month.
There is a cap of €25 a month on the total of al charges or €20 a month (max €200 a year) for those who have a specific offer, for individuals or households in precarious circumstances (fragilité financière). The first of these caps was effective Feb 2019 and the second applies from June 2019.