Payment accounts

The Law of 13 June 2017 on payment accounts (“Law on payment accounts”) contains provisions on the following subjects:

• transparency and comparability of fees related to payment accounts;
• switching payment account; and
• access to payment accounts with basic features.

The CSSF has been empowered to ensure the application and enforcement of the Law on payment accounts. In this respect, the CSSF has been granted all supervisory, inspection and investigation powers that are necessary for the exercise of its functions. The CSSF may take sanctions against professionals who breach the Law on payment accounts (warning, blame, administrative fines up to 250.000 EUR, prohibition to offer payment accounts).

Furthermore, the CSSF is competent to receive complaints from consumers concerning professionals subject to its supervision in relation with the application of the Law on payment accounts and to act as an intermediary in order to seek an amicable (extrajudicial) settlement of these complaints.

The payment account is an account which is held in the name of one or more consumers and which is used for placing, transferring or withdrawing funds. For instance, a current account is a payment account.

In order to ensure that consumers receive transparent information on payment accounts, the Law on payment accounts foresees that payment service providers provide consumers with:

• a fee information document and
• a statement of fees.

Fee information document

The Law on payment accounts provides that consumers will receive, in due time before entering into a contract for a payment account, a fee information document from payment service providers.

The fee information document will inform consumers on the fees that are charged for the following services in case they are offered by payment service providers:

• maintenance of a payment account;
• providing a credit card;
• providing a debit card;
• arranged overdraft;
• sending money;
• standing order;
• direct debit; and
• cash withdrawal.

Statement of fees

The Law on payment accounts provides that consumers receive at least annually and free of charge a statement of fees from their payment service providers. In the statement of fees, consumers will find a list of all the fees relating to their payment accounts that have been charged to them over a year.

In accordance with the Law on payment accounts, the CSSF has established a comparison website concerning fees charged for the most representative services linked to a payment account by payment service providers which:

• have at least 25 agencies in Luxembourg and hold at least 2.5% of the deposits as defined by point 36 of Article 1 of the Law of 18 December 2015 on the failure of credit institutions and certain investment firms, as amended, or which
• have expressly requested the CSSF to publish their fees on the comparison website.

The comparison website of the CSSF can be found by clicking on the following link: http://www.frais-compte-paiement.lu.

It is to be noted that the fees that are published on the comparison website of the CSSF may not correspond to the fees that payment service providers might apply to their clients when offering a package of services.

The Law on payment accounts contains provisions concerning the transfer by consumers in Luxembourg of all or part of the payment services that are attached to their payment accounts (e.g. credit transfers, direct debits and standing orders) to a payment account held by another payment service provider. The Law on payment accounts provides that consumers who do not wish to carry out the switching on their own may “authorise” their “new” payment service provider to carry out all tasks that are required by that transfer to happen smoothly.

Consumers will define in their authorisation in writing the different tasks to be fulfilled by the “new” payment service provider and inform it of the date on which standing orders or direct debits that are linked to the payment account to be transferred have to be carried out.

It is to be noted that the Law on payment accounts provides that fees charged to consumers within the accomplishment of the payment account switching process shall be reasonable.

Institutions which meet cumulatively the following two conditions in Luxembourg must offer consumers payment accounts with basic features:

1. they must have at least 25 agencies in Luxembourg; and
2. hold at least 2.5% of the covered deposits as defined in point (36) of Article 1 of the Law of 18 December 2015 on the failure of credit institutions and certain investment firms.

The institutions which meet these conditions and consequently must offer consumers payment accounts with basic features in Luxembourg are the following institutions:

• Banque et Caisse d’Epargne de l’Etat, Luxembourg;
• Banque Raiffeisen;
• BGL BNP Paribas;
• POST Luxembourg.

Moreover, Banque Internationale à Luxembourg has chosen to offer payment accounts with basic features as well.

Consumers legally residing in the European Union, including consumers who are not granted a residence permit but whose expulsion is impossible for legal or factual reasons, have the right to open and use a payment account with basic features with the above-mentioned institutions. Such a right applies irrespective of the consumer’s place of residence.

A payment account with basic features includes the following services:

1. services allowing all the operations required for the opening, operating and closing of a payment account;
2. services allowing funds to be placed in a payment account;
3. services allowing cash withdrawals within the European Union from a payment account at the counter or at automated teller machines during or outside the concerned institution’s opening hours;
4. services allowing the execution of the following payment transactions within the European Union:

• a) direct debits;
• b) payment transactions through a payment card, including online payments;
• c) credit transfers, including standing orders, at, where available, terminals and counters and via the online facilities of the institutions concerned.

Institutions offering payment accounts with basic features may refuse an application for opening a payment account with basic features where a consumer already holds a payment account in Luxembourg which allows him/her to make use of the services listed above (unless the consumer declares that s/he has received notice that this payment account will be closed).

It should be noted that an application for opening a payment account with basic features may be refused when the consumer provides inaccurate or misleading information in the context of an application procedure for opening a payment account with basic features or when the institution with which such application has been made has reasons to suspect that the payment account with basic features would be used for illegal purposes.

The institutions offering payment accounts with basic features must open these accounts or refuse a consumer’s application for such accounts without undue delay and at the latest 10 business days after receiving a complete application.

In the event of refusal to open a payment account with basic features, the institution concerned must immediately inform the consumer of the refusal and of the specific reason for that refusal, unless such disclosure would be contrary to objectives of national security and public policy or the Law of 12 November 2004 on the fight against money laundering and terrorist financing, as amended.

Institutions which offer payment accounts with basic features must inform consumers of the procedure for submitting a complaint against the refusal to open a payment account with basic features and of the right to refer to the CSSF to challenge the refusal. On this occasion, they must provide consumers with the relevant contact details of the CSSF.

Consumers may also contact the CSSF if they consider that the institution with which a payment account with basic features was opened unduly closed this account. The reasons for closing a payment account with basic features that are acceptable are listed in Article 29(2) of the Law of 13 June 2017 on payment accounts.