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N26 Bank Terminates Accounts and Doesn't Pay Back Funds - What Affected Customers Can Do

The German N26 Bank GmbH from Berlin advertises that it makes everyday life easier for its customers. For a growing number of N26 customers, however, this is exactly no longer the case when they find an email in their inbox with the subject "Cancellation of your Account". From this point on, they no longer have access to their account, which means in particular that transfers are no longer possible and account statements can no longer be accessed. This is often followed by a lengthy communication with the partly automated customer support, in which proof of the origin of the funds is to be presented. Often, even this does not lead to the desired success, which is particularly problematic if the customer is urgently dependent on the availability of his bank balance.

Kronsteyn law firm represents clients in pursuing their rights against the bank. In this article, you will learn more about the background to the terminations and how you, as a person affected, can use a German lawyer to get your money quickly.

Cancellations En Masse - Balances Frozen

For more than a year, N26 has been cancelling bank accounts en masse. These terminations take place continuously, but sometimes also in waves of terminations. Affected customers receive a standardised email with which the bank declares the immediate termination of the contractual relationship. The bank regularly refers to routine checks on the basis of which "irregularities" were found. This finding would now necessitate an extraordinary termination.

The terminations are regularly related to standardised, IT-supported monitoring of customer relationships. At banks, computer algorithms continuously analyse transactions with a view to the risk of money laundering or terrorist financing and assign an individual risk score to each customer profile. If this results in a high value, banks are obliged to monitor the customers concerned more closely. Some banks also request further information on the origin of the assets (so-called proof of origin of funds).

In the case of N26, it seems as if it wants to get rid of the additional expense associated with the higher risk classification by simply terminating business relationships. For this, they even accept serious consequences on the side of their customers. Without access to the account, bills or rents can no longer be paid, business customers can suffer damage to their reputation, etc. Those affected describe that even after providing extensive proof of funds, no payment of credit balances has been made. There are cases where the bank has stopped communication. It is also reported that the contact was not even returned by the bank.

Suspicious Activity Reports to FIU

If the N26 money laundering officer suspects money laundering or terrorist financing, the N26 is legally obliged to submit a so-called suspicious activity report to the German Central Financial Transaction Investigation Unit (also: FIU, abbreviation for "Financial Intelligence Unit"). The FIU can then conduct further investigations and obtain information from other authorities or FIUs in other Member States. It can also order the N26 to freeze the bank balance suspected of money laundering for a maximum period of one month. The N26 is then not entitled to pay out the credit balance concerned for this period.

What Those Affected Can Do

If the bank has not disbursed the funds again even after providing information about their origin, it is time to consider further steps.

First of all, those affected can take extrajudicial action against N26. The bank should be explicitly requested to repay the remaining credit balance. Here it is important to identify the terminated account by stating the IBAN, to set the bank a clear deadline for repayment and to provide the bank details of the recipient account. If the bank is requested to pay out by e-mail, the e-mail address already known to the N26 should be used. For reasons of preserving evidence, however, it is recommended to send the request in writing by registered mail.

If the bank does not pay the credit balance within the set time limit, carrying out a dunning procedure is often the most effective and cheapest way to achieve a quick payment of the bank balance. In addition, a one-month period should also be waited in case the FIU has ordered the N26 not to dispose of the funds. The dunning procedure is a judicial procedure without a judge's decision and is therefore much less costly than normal court proceedings. In the course of these proceedings, N26 will be served with a court order. In this notice, the bank is requested to pay the account balance plus lawyer's fees and court costs within a period of two weeks. If the bank does not pay, an enforcement order can be issued. If the bank files an objection, the case is handed over to the competent court. But it will not usually come to that. This is because the order for payment already exerts sufficient legal pressure to get the bank to pay out the bank balances.

Check claims for damages

In addition to the mere repayment of the credit balance, claims for damages may also be given if the person concerned has suffered a loss. The relevant breach of duty by N26 may result in particular from the unlawfulness of an extraordinary termination, since according to its General Terms and Conditions the bank is only entitled to do so if there is good cause. However, a claim for damages can also be based on the unlawful withholding of money.


Dr. Hendrik Müller-Lankow

Attorney-at-law, LL. M. (UCL)

Hendrik Müller-Lankow

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