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Brexit loophole confirmed as cause of new UK-France Sepa bank fees

French banking federation says charges are now possible as the European law pricing principle no longer applies to UK-EU Sepa transfers

Connexion readers have reported encountering unexpected fees on transfers sent from the UK Pic: fizkes / Shutterstock

Dozens of Connexion readers have reported discovering – since the Brexit transition period ended – unexpected new bank charges on regular payments coming from the UK including pension instalments. These same payments did not have fees attached prior to Brexit.

Some report their banks as having said the issue stemmed from transfers being made through sterling systems rather than the Sepa euro system. However in other cases, charges have been made even where Sepa transfers were reportedly used.

Read more: €36 French bank fees for UK pension transfers causes confusion

Within the EU Sepa transfers incur no more charges than domestic transfers, however the Fédération Bancaire Française told The Connexion that despite the UK having retained the ability to use Sepa transfers, transfers from the country are no longer protected by this rule.

A spokesman said: “From a regulatory standpoint, the application of fees is governed by European regulation 260 / 2012 which, to ensure the proper functioning of the internal market, creates an integrated market for electronic payments in euros where there is no difference between national and cross-border payments.

“While the British can continue to use the Sepa standards, the pricing principle under European law is no longer applicable if one of the two parties is a Brexit nation. Therefore, it is not abnormal that fees can be applied in this case.”

The spokesman added that, apart from this, banks’ decisions on fees are a commercial matter, taking account of competition, and not something the federation can comment on.

Some Crédit Agricole branches now charging €18 flat fee

Several Crédit Agricole customers in separate areas of France say they are now being charged a flat rate of €18 for every transfer from a UK bank. 

One reader in the Nord Midi-Pyrénées area was told by the bank that transfers from the UK are, since Brexit, subject to the same rates as have always applied to those from non-EU banks.

Another added: “We transfer at least once per month – it all adds up considering the monthly account fee and annual card charge already in place – we have requested the bank take a look at this and await their comments.” 

A third customer said that the charges were “very frustrating.” 

A Milleis (formerly Barclays France) account holder said that he began to be charged €12 per transfer from the UK in early 2021, without “announcement nor explanation” although when he moved to Crédit Agricole the fees stopped.

A BNP Paribas customer reported receiving a €8 charge on pension payments coming from Barclays since August 2021, and that “BNP say the charge is from Barclays and Barclays say that it is from BNP.”

Sterling rather than Sepa payments 

Despite Brexit, the UK remains a member of the Single Euro Payments Area (Sepa) which allows for domestic and international bank transfers in euros. It is one of the usual rules of the system that Sepa payments incur the same fees as local domestic bank transfers, which means that they are normally free.

If the UK organisation paying into a French bank account uses Sepa and not, for example, Swift, there would, pre-Brexit, not have been any fees added to the payment.

If your bank did charge for transfers within the same country then a Sepa payment could have come with an added fee, but this was rare.
However, as explained above, the French banking federation states that Brexit has created an exception to the usual rule, allowing banks to charge despite Sepa having been used.

This is not, however, being applied by all banks and in all parts of France (some French banks, such as Crédit Agricole, work very much on a regional basis). What notice should be given to customers of charges is a separate issue which we will be looking into.

One reader told us that they began experiencing problems with transferring their Canada Life pension payments from NatWest into their HSBC France accounts. This was because the Sepa payment in euros kept reverting to Chaps (Clearing House Automated Payment System, which is in sterling), so triggering a fee.

The same happened to another HSBC France account holder who was told by the bank that they had also received this payment as a Chaps transfer. This reader later discovered that their pensions provider had sent the money as a Sepa payment but that it had been wrongly changed to Chaps by NatWest.

Charged €15 for UK annuity payments

Another reader had contacted HSBC France over the charges, and was told to request Sepa payments from their pensions provider. After doing this they were no longer charged.

Another HSBC France customer started being charged €15 for UK annuity payments arriving in his account, and the bank again stated that this was because the transaction was not Sepa.

However, sometimes charges are still incurred even though the transfer was made through a Sepa payment. 

One Crédit Agricole customer in Hautes-Alpes has been charged €20 for all funds arriving in his account from the UK since January 1, 2021.

“We assumed it was a fee to receive money from outside the EU. We checked with our bank and didn’t get a helpful response. Their terms and conditions say that a €20 fee is payable on all payments except those from Sepa. We checked with the organisation we use to transfer money which said they use Sepa so we shouldn’t have to pay anything,” he said.

If you do receive an additional charge we suggest, despite the banking federation’s statement, that it would be worth contacting the banks involved to double check that the payment was indeed made through Sepa, as in some cases this has resolved the issue of fees.

Since Brexit there have been reports of account holders – especially in Spain – being charged for receiving euros from a UK bank, and it seems that some institutions had introduced a management fee based on the country of origin.

Some experts take different view

Despite the comments by the French banking federation, the European Consumer Centre, which advises people with cross-border consumer issues in Europe, took a different view when we contacted the organisation today.

Its director for France, Bianca Shulz, said: "Even though the UK has left the EU, it remains a Sepa member; the rules have therefore not changed with regard to Sepa transfers.

"If, however, the transfers were not made in euros, fees do apply and the €20 or so levied could be fees for receiving the money or exchange fees, for example, with the transfer being treated as an international transfer."

The Connexion has also contacted banking customer body France Conso Banque, the UK Financial Conduct Authority, a French banking law firm and Crédit Agricole for further clarification on this issue and the action customers should take. We are awaiting responses.

Other ways to avoid expensive fees 

If you are worried about being charged by your bank for payments from the UK, several of our readers have recommended using a payment service such as Revolut, which offers a certain number of free international transfers each month. 

One also suggested using wise.com, through which you can create a sterling and euro account and pay a small fee to obtain a Wise debit card. You can then convert pounds into euros between your accounts and then transfer the funds to your French bank account.

Finally, another reader uses a currency exchange company which he said charges €3 for transfers to French bank accounts. 

“Using this method I am able to look at the exchange rate and either transfer at the day’s ‘spot rate‘ or schedule a better rate of exchange should I choose to do so,” he added.

If you have been affected by this issue and want to share your experience please contact us via news@connexionfrance.com

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