French bank account only demands are illegal

French consumer fraud agency the DGCCRF has warned firms it is illegal to refuse payments in euros from bank accounts in other EU countries, including the UK, under the SEPA agreement.

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This means, for example, UK residents with French holiday homes should not need a French bank account to pay French utility bills and instead can pay from a UK account... if their UK bank allows it.

If done through a normal account, costs should be no more than a local transfer (plus currency exchange fees if appropriate) and the money should be paid in 1-2 days.

The DGCCRF alert came after complaints from consumers who had tried to set up payments and standing orders and been refused unless they paid from a French bank.

UK banks confirm they process payments to SEPA (the Single Euro Payments Area) – which includes all EU countries plus Iceland, Liechten­stein, Norway, Switzerland, Monaco and San Marino – however, their approach is inconsistent, and some restrict activity to certain accounts and impose charges. It is not clear what impact Brexit may have but the European Payments Council has said UK banks have indicated they would like to remain inside SEPA.

The launch of SEPA in 2014 standardised bank account IBANs and BIC codes, meaning cross-border transactions should be more convenient.

The European Central Bank said consumers only need one bank account. From this, they can effect transfers and direct debit payments in euro around the euro area as easily as making national payments.

“They could pay rent for children studying abroad, pay for a holiday home or pay for services provided by European companies (mobile telephone services, insurance, utilities).

“If you live, work or study outside your home country you no longer need one account at home and another abroad.”

In practice and with the extra exchange rate implications, the European Payments Council said UK banks make a commercial decision on what services to offer clients. This means UK customers can face problems when they try to set up a payment.

We asked leading banks for clarification:

Barclays allows direct debits from a basic account and said other payments could be done online or by smartphone.

HSBC said customers needed a euro HCA (HSBC Currency Account) from which they can set up SEPA Direct Debits.

Lloyds Bank customers can pay French utilities using an international standing order from a Lloyds international current account, but not SEPA direct debits (which are also not available with Halifax or Bank of Scotland current accounts).

Lloyds Bank, Halifax and Bank of Scotland personal current account customers cannot set up an international standing order but can make and receive individual international payments.

Royal Bank of Scotland current account holders can set up standing orders in euros and direct debits in euros.