Why do French banks ask so many questions?

Reader Question: I went to withdraw money from my La Poste bank account and was surprised to be asked questions such as “are you retired?”, “what was your profession?”, “what is your marital status?” and “who will inherit from you?”. We are thinking of closing the account due to the intrusion. Why do they ask so many questions?

French bank account holders are sometimes surprised to receive requests from banks for documentation of various kinds and wonder whether or not it is an obligation to comply.

Readers have reported being asked for their passports, driving licences, utility bills and paperwork showing their income or home ownership.

Such information may be required when you open an account or when you request a new service (a loan, for example) but more generally banks are expected to update their knowledge of you during their commercial relationship with you.

If asked such questions, you should comply as there is a risk that if you do not the bank could see this as justification for closing your account.

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An eye on their accounts

You may be more likely to receive such queries relating to accounts that you do not use very often, and if you only have infrequent contact with your bank, as opposed to a bank which regularly receives your salary, or with which you hold a mortgage etc.

The requests are linked to the obligations on banks to know their client and have an overview of their financial situation. This is viewed as important to combat money laundering and the financing of terrorism.

According to the consumer group, France Conso Banque, attitudes have become tougher in recent years. Its general secretary, Patrick Sourdain, said: “French banks regularly ask for very personal information from their customers, some of whom refuse to provide this information, which they consider private and too intrusive – even though it is obligatory to provide it. If the bank does not receive the information from its customers it often triggers a notice to close the account.”

Banks can ask for any elements that allow them to estimate your income and/or assets, however they should state the reason for this and what the information will be used for, as well as the consequences of not complying. You should be given the chance to opt out of the bank using the information for commercial reasons (offering you certain financial products etc).

For income, they may be looking for your tax statement or a copy of your tax declaration, payslips, pension statements etc. With regard to assets, they could ask for property deeds, share certificates or investment policy contracts.

Banks may also ask for information regarding unusual movements into or out of the account, for example when you sell a property or car.

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EU regulations

According to CIC bank, the requirements originate with EU regulations (although they are in French domestic law). Banks are closely involved in people’s financial dealings so they are seen as having a responsibility to help in the fight against corrupt practices.

It says that the level of ‘vigilance’ the bank exercises will vary, depending on how potentially ‘risky’ the customer and their financial activities are deemed to be in terms of the possibility for money laundering. Their questions are about “getting to know you”, it says.

If a bank suspects that movements into or out of a customer’s accounts are linked to money laundering or fraud, it is also required to report this to a body called Tracfin, which has powers to investigate further if it deems this appropriate.