Frankfurt After the protests of many users, the online bank N26 reacted to the numerous account terminations from the past week and gave reasons for its actions for the first time: “Blocking and closing accounts is an important part of the measures that N26 as a bank has to take to specifically to take action against financial crime,” writes the Berlin neobank in a blog post published on Monday evening on its website.
N26 regularly conducts routine checks on millions of customer accounts to detect suspicious activity or account abuse. In some cases, the results of the checks make it necessary to block accounts, the blog entry continues.
The Berlin-based neobank acknowledged that it may have made mistakes with the account terminations: From time to time, they may misidentify a legitimate customer as a potential scammer because the evidence found by the anti-financial crime team “may not be beyond reasonable doubt are,” it says. Unfortunately, it is not possible to solve this correctly 100 percent of the time.
The Handelsblatt is aware of 40 cases of users based in Germany who have had no access to their accounts since last Thursday. There are also numerous complaints from customers in France and Italy on Twitter. Some customers who were still able to log into their account even say that N26 withdrew the entire amount from the account.
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As a reason, customers have received the same letter from the online bank, which says: N26 has found a violation of the general terms and conditions on the account in question. “Therefore, we declare the extraordinary termination of your N26 account.” The termination takes effect immediately.
In order to have the remaining account balance paid out at all, N26 requires “proof of the origin of the funds through appropriate receipts”. The wording already suggested that the mass terminations are related to N26’s attempt to install better money laundering controls. This is because proof of the origin of money is usually required in connection with money laundering and fraudulent account activity.
N26 has long been under pressure from European authorities, such as German and Italian banking regulators, to improve its money laundering and fraud controls. In the last two years in particular, there have been numerous cases in which scammers have used N26 accounts to transfer criminally looted money abroad. The financial regulator Bafin had therefore sent a money laundering supervisor to the institute and capped the fintech’s new business, while the Banca d’Italia completely stopped taking on new customers in Italy.
So far, the affected customers have received little or no information about their account closures, even when asked. N26 justifies it by saying that “our customer service is legally prohibited from sharing information about affected accounts during this time” – even to the respective account holders. This should prevent cyber criminals from receiving information about ongoing investigations and fraudsters should be prevented from using this information to avoid being recognized in the future, according to the N26 blog entry.
More: Again trouble at N26: smartphone bank terminates numerous accounts without notice.