The right of clients against the blocking of bank accounts | My Rights | Economy

A person withdraws money from an ATM, in a file image.  Jaime Villanueva
A person withdraws money from an ATM, in a file image. Jaime Villanueva

“We inform you that, as long as you do not send the requested documentation, we must proceed to block the bank accounts that we have with you.” It is the message that many citizens have received or will receive from their financial institution and that will prevent them from using their checking account or their cards, paying bills, making or receiving transfers, entering payroll by bank or a simple bizum.

This action of the banks produces many unknowns among the clients of the entities. Why has the bank blocked my account? How can I unlock it? Can a bank account be blocked without prior notice?

If the bank account is blocked, it is advisable to update the personal information as soon as possible to avoid the undesirable effects of this temporary cancellation. In addition, if this measure is finally adopted that prevents banking operations, It should be applied gradually, taking into account the intensity of the restrictions, the terms in which it will be applied and the particular conditions of each client.

Reasons for blocking

The reasons why a financial institution may block its clients’ accounts are different, for example, due to a lack of identifying documentation. But the Law on Prevention of Money Laundering and Financing of Terrorism requires entities to keep the documentation of their clients up to date necessary for their correct identification and follow-up. Citizens are required to copy their DNI, residence permit or identification document of the country of origin. In the case of companies and legal persons, a document proving the name of the company, its legal form, address and tax identification.

However, banks can also claim any document that allows them to know the origin of the funds such as income tax return, payroll receipts, social security contributions, tax self-assessments, etc. But it must be based on the criterion of proportionality and the entity has to justify the cause of the requirement, normally the regulations on the prevention of money laundering. The updating of these data, according to financial institutions, is usually done every three years for those customers who are classified as medium risk and every five years for low risk customers.

Accounts can also be blocked to comply with the Money Laundering Prevention Law. In this case, the financial institution must request information on the professional activity of its clients, which is known as the KYC (Know Your Customer). It is an anti-fraud measure that all banks must follow to prevent money laundering and terrorist financing, according to the banking product comparator HelpMyCash. Failure to provide this information may lead to the account being blocked until the required documentation is submitted. In addition, if the bank detects irregular movements, it could also block the account if the origin and origin of that money is not justified.

Another reason is the death of the owner. When the bank is aware of this, it will block the total balance of the account (if it only had one owner) or the proportional part if the account had more than one owner: half if there are two owners, 33% if there are three and so on. successively. The financial institution may only deliver the money deposited to those who prove that they are heirs of the deceased.

Also due to conflict between the holders. And it is that, in a bank account with two or more holders, if contradictory orders are issued, the bank can block the account if it detects incompatibility between the operations. This is the case of marital separations or disagreements between partners of a company or business.

Obligations of banks

The Bank of Spain has made public its common good practice criteria on the application of the regulations for the prevention of money laundering in the blocking or cancellation of bank accounts.

The principle of proportionality must be the main criterion to which the blocking of current accounts by financial entities must comply. Since 2020, the Bank of Spain requires banks to comply with different criteria. In any case, the bank must inform the client of the generic cause – previously or immediately – for which the bank account is blocked or canceled, unless the financial institution considers that in the specific case there are special confidentiality reasons for not do it.

But the entity must be flexible in the application of the blocking measures of the accounts, having to assess the special circumstances in each specific case, for example, the impediments derived from the client’s state of health or, in an emptied Spain, the distance from the place where it resides.

In any case, the bank must block or cancel the bank account under the principle of gradualism when the user does not meet their generalized, routine or periodic documentation or information requirements and without significant elements of money laundering risk. Both the intensity of the measures adopted, the different deadlines relating to their application and the subjective conditions of the citizens must be considered as a whole.

From the Association of Financial Users (ASUFIN), they assure that in “general lines the entities act according to good practices”, being more demanding for the cases of companies, then autonomous and more flexible with consumers in general. The most common is that accounts are temporarily closed, “when in addition to missing information there are other types of indications of irregular operations,” according to ASUFIN.

Blockages not allowed

Current account blocks will not be considered provided when the data is not sent due to the expiration of the DNI or the residence permit for foreigners, unless the bank accredits that due to the time that has elapsed the identity of the interested party may be insufficiently accredited.

When the representative positions of the communities of owners expire, the bank cancellation is not provided either and the appointments must be understood tacitly extended. In this case, the account can only be blocked when there are reasons to believe that such positions have been revoked, new ones have been appointed or there are significant discrepancies in this regard within the affected community.

Neither is it proportional to block accounts when the client’s personal income tax declaration is not provided, provided that there has not been previously a significant entity operation that is deemed necessary to justify by the client.

What about mortgages?

Based on the principle of proportionality, when there is a mortgage, a credit or any other type of loans or asset products with pending payments, the financial institution must allow reasonable operations to meet these expenses related to the blocked checking account.

But this principle of proportionality will not be applied if the bank values ​​and states that in the specific case raised – either for the amount of the transaction, or for other causes of special significance – it must proceed to completely block the operations.

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