Bank accounts are the backbone of the financial system, since they allow the customer to perform an unlimited number of operations and transactions. However, it may happen that the bank decides to block your account, which means that all the products and services associated with it will be suspended, i.e., while the account is blocked you will not be able to dispose of the money it contains or operate with it.
The Bank of Spain understands that measures involving restrictions on customers’ rights, such as the blocking of payment accounts, must not only be justified, but must also be notified to customers as soon as possible, so as not to cause them unnecessary harm.
In general, institutions may proceed to block a bank account either by prior judicial authorization, or by the concurrence of a duly justified cause, circumstances which, in any case, must be accredited and notified to the holder in advance.
Guide on the blocking of bank accounts: Causes, consequences and legal remedies
The Royal Decree – law 19/2017, of November 24, on basic payment accounts, transfer of payment accounts and comparability of fees, in its article 6 establishes the assumptions by which credit institutions may unilaterally terminate the basic payment account contract::
– The account has been deliberately used for unlawful purposes.
– No operation has been carried out for more than 24 consecutive months.
– Incorrect information has been provided, when if the correct information had been provided, he/she would not have been entitled to such an account
– The customer is not legally resident in the European Union
– The customer has subsequently opened an account in Spain that allows him to make use of the services associated with payment accounts
– The documentation or information necessary to comply with the Money Laundering Prevention Law has not been provided.
In this regard, Article 7 establishes that, when the entity terminates the payment contract for any of the above reasons, it must notify the customer of this circumstance in writing, with justification and at least two months prior to the effective termination, in the case of individuals. Similarly, and if we are in the case of an SME, Article 1 of Law 5/2015 of April 27, 2015, on the promotion of business financing provides that when the entity intends not to extend or terminate the flow of financing that they have been granting, this notification period will be three months.
However, it is specified that, when the account is blocked in order to comply with the regulations for the prevention of money laundering, this may be done without prior justification and immediately.
The latter has allowed banks to block bank accounts without prior justification or notice, when they have the slightest suspicion, but without having gathered the necessary information or documentation to ascertain their decision, despite the fact that the Bank of Spain explains that “the regulations on money laundering and financing of terrorism require banks to request the documentation they consider necessary to identify and monitor the account holder and his operations, so that if the holder does not comply with their request, the blocking of the account is considered justified”.
However, the Conduct Department of the Bank of Spain has reiterated in its resolutions that it is not competent to pronounce on the adequacy of the measures adopted by the banking entities when it is a question of compliance with the money laundering regulations, and therefore cannot judge whether the interested party should have been previously warned.
For this reason, when it is considered that the blocking of the account by the bank has been carried out improperly, a series of extrajudicial and judicial actions can be carried out.
Thus, in the first place, a claim for damages can and should be filed with the bank’s Customer Ombudsman Department. If no response is received within two months, or if the response is not favorable, a claim may be submitted to the Bank of Spain’s Claims Service.
In the same way, a legal action may be filed requesting such compensation for the damages caused by the blocking of the bank account without due diligence and, if applicable, undue.
In this regard it is interesting to note the Ruling No. 480/2012 issued by the Supreme Court on July 18, which states that “an exercise of the termination power in a surprising or untimely manner, without a margin of reaction in the form of a prudent notice, can be assessed as an abusive exercise of right, or constituting unfair conduct in bad faith in the exercise of rights, which although it does not prevent the termination of the relationship, it should give rise to compensation when it causes damages”.
In short, although the parties have the right to unilaterally terminate contracts of indefinite duration, this situation must be done in accordance with the requirements of the regulations in force, that is to say, notified with sufficient notice and in a justified manner, in order to avoid an abusive exercise of rights by the financial institution.
If you are facing problems related to the blocking of your bank account and you are looking for specialized legal advice, do not hesitate to turn to Navas&Cusí. Our team of lawyers specialized in Banking Law is prepared to offer you the necessary guidance and support to resolve your situation effectively. With offices in both Madrid and Barcelona, we understand the complexity of these cases and work hard to protect your rights and interests.
