The Payment Accounts Directive, transposed in September 2016 by the European Union (Payment Accounts) Regulations 2016 (S.I. No. 482 of 2016), contains a right to open a payment account with basic features with a credit institution. This right extends to any person who is legally resident in the European Union, regardless of whether he or she has a fixed address.
A payment account with basic features is similar to a regular payment account in many respects. It allows a person to place money in the account, withdraw cash from the account, and to make payments using direct debits, debit cards, or credit transfers. An important difference is that a payment account with basic features does not offer credit facilities, such as an overdraft.
Regulation 16 of the European Union (Payment Accounts) Regulations 2016 permits a credit institution to refuse to open an account on one of two grounds. Those grounds are set out in the legislation, but essentially are that the applicant already holds a payment account or that refusal is necessary to comply with money laundering and terrorist financing legislation.
Regulation 16 (5) stipulates that, where a relevant credit institution decides to refuse an application, it shall:
“(a) notify the applicant in writing and free of charge of the refusal and the grounds for the refusal, unless such notification would be contrary to section 49 of the Act of 2010 or objectives of national security or public policy,
(b) where the refusal is on the grounds referred to in paragraph (4), take appropriate measures as required under Chapter 4 of Part 4 of the Act of 2010,
(c) advise the consumer of:-
(i) the procedure for submitting a complaint to it against the refusal, and
(ii) the consumer’s right to contact the Bank and the Financial Services Ombudsman in relation to the refusal, including the relevant contact details.”
Firms should also be mindful of provision 2.11 of the Consumer Protection Code 2012 (the Code). This provides that a regulated entity must ensure that in all its dealings with customers and within the context of its authorisation it “without prejudice to the pursuit of its legitimate commercial aims, does not, through its policies, procedures, or working practices, prevent access to basic financial services”.
If an applicant is refused an account he or she can submit a complaint against that decision to the credit institution. A consumer who has a complaint that is not resolved by the credit institution’s internal complaints mechanism may make a complaint to the independent Financial Services and Pensions Ombudsman.
The Central Bank is the designated competent authority for the purposes of the European Union (Payment Accounts) Regulations 2016. The Central Bank informs me that information referring to the number of persons turned down would not be disclosable.