Five Danish banks have received orders after findings of insufficient compliance with the rules for basic payment accounts.

Finanstilsynet, the Danish Financial Supervisory Authority, has investigated how nine financial institutions handle consumers’ statutory right to a basic payment account, and found “a lot to correct.” The investigation began after learning in 2023 that many citizens still have problems obtaining the statutorily mandated basic payment account.

“There are very clear rules for a basic payment account. Therefore, we have a clear expectation that these rights will be secured for the customers, and therefore we are now again tightening the rules for the entire sector,” said the authority’s deputy director Rikke-Louise Ørum Petersen.

Injunctions for five banks

The findings included a number of deficiencies and violations, which have led to injunctions for five of the banks – Coop Bank, Arbejdernes Landsbank, Sparekassen Jylland-Fyn, Lån og Spar Bank, and Lunar Bank.

The injunctions were based on the following violations:

• the case processing deadline for an application for a basic payment account of 10 days had been exceeded;
• incorrect practice for calculating the case processing deadline;
• the consumer had not received a written justification or received insufficient reasons;
• the consumer had not received complaint instructions;
• lack of concrete assessment in connection with the application; and
• illegal application. 

Violations of the Danish Payment Accounts Act

The banks were found breaching different sections of the Danish Payment Accounts Act, and received various orders.

Coop Bank: § 11, paragraph 4, pt. 2-3 and 5. Coop Bank was ordered to:

1. Justify its refusal to the consumer concretely and properly, and ensure that these rules are followed in all relevant branches and in all documents.
2. Ensure that when it refuses to set up a basic payment account, it informs the consumer about the possibility of appealing the decision to the Financial Appeals Board, and to inform the Danish Financial Supervisory Authority about the decision, including ensuring that all future refusals contain an appeals guide.

It must also submit documentation on how it has ensured that it complies with orders.

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Arbejdernes Landsbank: § 11, paragraph 4, and § 13, paragraph 2. Arbejdernes Landsbank was ordered to:

1. Ensure that it opens a basic payment account as soon as possible within 10 working days after receiving a complete application.
2. Report monthly to the Danish Financial Supervisory Authority on how it complies with the case processing deadline in the upcoming 12 months.
3. Only terminate a consumer’s basic payment account with immediate effect when the conditions in § 13, paragraph 2, pt 3, are fulfilled.
4. Ensure when it refuses to set up a basic payment account that it does so in writing and includes information about the option to submit the decision for the Danish Financial Supervisory Authority.

For 1, 3 and 4, Arbejdernes Landsbank must also ensure that these rules are followed in all relevant branches and in documents.

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Sparekassen Jylland-Fyn: § 11, paragraph 4, pt. 1. Sparekassen Sjælland-Fyn was ordered to change its practice to now calculate and meet the deadline of 10 working days from the time it receives an application with all necessary information for setting up a basic payment account.

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Lån og Spar Bank: § 11, paragraph 4, pt. 5. Lån og Spar Bank was ordered to ensure that when it refuses to set up a basic payment account, it must inform the consumer about the possibility of appealing the decision to the Financial Appeals Board, and to inform the Danish Financial Supervisory Authority about the decision.

Lån og Spar Bank must also submit documentation on how it has ensured that it complies with the orders.

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Lunar Bank: § 11, paragraph 1 cf 2, and § 11, paragraph 3 and 4. Lunar Bank was ordered to:

1. Stop requiring consumers to provide a CPR number (Danish social security number) for applying to a basic payment account, and set up its systems and procedures so those without it can apply for an account.
2. Stop making demands that consumers must have a permanent residence or need to demonstrate good reasons for applying for a basic payment account.
3. Ensure that it always makes a concrete assessment of applications, including from previous customers, and only give a refusal when there’s basis for it. Lunar Bank must also inform the consumer of the option to appeal the decision to the Financial Appeals Board, and the option to submit the decision to the Danish Financial Supervisory Authority.
4. Justify that its refusals are concretely and properly justified and documented.

For 2, 3 and 4, Lunar bank must also ensure that these rules are followed in all relevant branches and in documents. It must also submit documentation on how it has ensured that it complies with the orders.