Some French customers are suing the Berlin smartphone bank.
(Photo: Getty Images)
Frankfort, Paris The Berlin smartphone bank N26, one of the most valuable start-ups in Germany, is threatened with legal difficulties in France: A number of customers in the neighboring country accuse the bank of having closed their accounts abruptly and having blocked the amounts there.
There is even a corresponding lawsuit. N26 defends itself against the allegations and refers to mandatory routine tests.
So far, around 50 N26 customers have joined the class action lawsuit, Emma Leoty from the Paris law firm Choisez & Associés told the Handelsblatt. “But I assume that there are significantly more people affected.”
The case is due to be heard in a court in Paris on April 12. “The initial goal is for N26 to release the blocked accounts immediately,” Leoty said. The lawyer is preparing another lawsuit to recover damages from N26 for her clients. Some of those affected needed the money in the frozen accounts to buy homes or cars, she said.
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N26 wants to become a leader in Europe
The latest criticism became public last month through a report by French radio station RMC. Affected N26 customers have joined forces on Facebook in a group with more than 700 members. Some of them have reported there in the past few days that the smartphone bank has now released their accounts.
The number of French customers who are annoyed by N26’s actions is small – the company puts the number of customers in France at 2.5 million. But the dispute comes at a bad time for N26. The fintech, which has just announced its withdrawal from the US market, wants to become one of the largest retail banks in Europe, as co-head Valentin Stalf said recently.
>> Read here: Why N26 is withdrawing from the USA and what the consequences are
N26 has been active in France since 2017. The start-up, which has been valued at almost eight billion euros since the latest round of financing last October, was founded in 2013. N26 has more than seven million customers in total.
N26 rejects the latest allegations. “Of course, we have no interest in blocking or closing accounts that are used regularly and in accordance with our terms and conditions.” N26 does not hold back customer deposits longer than necessary. The company points out that it is required to carry out routine account checks under European banking regulations.
Criticism of the German financial supervisory authority
It is obvious that N26 has recently significantly increased its efforts to prevent financial crime and the corresponding systems, especially when screening new customers. Because the German financial regulator Bafin reacted to the fintech with sanctions: Due to deficiencies in risk management, the bank in Europe may initially grow by a maximum of 50,000 customers per month, as was announced in the fall.
Leoty confirmed that some of her clients could regain access to her money. “Bringing in a law firm did have a positive effect,” she said. However, the procedure in the French judiciary will be continued, especially with regard to the claims for damages.
According to her own statements, the lawyer informed the financial market authority AMF about the civil lawsuit against N26. The supervisory authority ACPR, which takes care of the banking and insurance sector, is apparently also interested in the case. According to French media reports, the authority asked the German neobank to explain itself about the allegations.
The ACPR did not want to comment on details and possible consequences for N26. In principle, one does not comment on individual cases, the authority said in response to a request from the Handelsblatt.
More: Billion valuation, but no business model? There is so much substance in Germany’s unicorns