Bunq (and others?) - banks paying different interest rates to depositors of different EU countries

KIFID response received. I hadn't complained from perspective of having a product that I was being unfairly treated on (i.e. lower interest), moreso that they were being untruthful on their website, which does not fall under the KIFID remit.

Thoughts welcomed. The only thing I can think of would be to go back and provide a statement that I have purchased the financial product, i.e. the deposit offer, and am being discrimated against on interest, and for a reason I do not believe to be true. Or do I give up.


We received your complaint about bunq B.V. on 2 August 2023. Kifid cannot handle yourcomplaint. I called you, but unfortunately you could not be reached. I will explain below why your complaint cannot be dealt with.Not a financial serviceKifid can only handle complaints about financial services provided by financial serviceproviders affiliated to us.

By financial services, you can think of services as referred to in theFinancial Supervision Act, such as insurance and banking products. The complaint must relatespecifically to the financial service purchased and about which dissatisfaction has arisen, andcannot be general in scope about, for example, the financial services provider's policies orprocedures. For the relevant provisions of the regulations, please refer to the annex to myletter.

Your complaint
From the documents you submitted, I understand that your complaint concerns thecommunicated reason, by bunq B.V. on their website, for offering different interest rates tocustomers from different countries. You do not dispute that this is allowed, but you disagreewith the reason given.

This concerns an overly general complaint regarding bunq B.V.'s policies or the way bunqB.V. provides information. No dissatisfaction follows from your complaint which specificallyarose from your purchased financial service from Bunq B.V..

Your complaint might be more suitable for the Dutch financial regulator AFM, where you can report possible financialcompany malpractices. See https://www.afm.nl/en/sector/themas/melden-misstanden-enincidenten for more information.

Decision

Because of the above, Kifid cannot handle your complaint. Do you disagree with thisdecision? Then you can object by filling in the objection form. You can find this atwww.kifid.nl/formulieren/. This form must be received by Kifid within four weeks from thedate of this letter.
 
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podgerodge said:
o dissatisfaction follows from your complaint which specificallyarose from your purchased financial service from Bunq B.V..
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You could perhaps write to Bunq and say "I am a Bunq depositor. I want a deposit rate as if I was a Dutch resident." Bunq would then write back and say "no" and perhaps then Kifid might entertain your complaint, but I suspect not.

You could also bring it to the attention of the AFM which is the Dutch consumer protection supervisor. But it's a bit like the Ombudsman/Central Bank division of responsibilities here and the AFM will most probably say "thank you for bringing it to our attention, but we do not deal with individual complaints as we are a supervisor. We may consider it in the overall context of the obligations of regulated entities."

If all this fails you can complain to DG FISMA of the European Commission on internal market grounds but you are some way off that.
 
The non-discrimination clause applies to businesses selling from one EU member state into others. E.g. an Irish online merchant cannot charge more to German than to French customers. With banking it's more complicated since it's one of the areas where single market principles don't fully apply. It's difficult to open a bank account or get a mortgage in another EU country just as banks can't directly trade with customers accross the EU without involvement of local regulators. Especially in small markets like Ireland those entry barriers reduce competition and facilitate consumer exploitation.
 
tomdublin said:
It's difficult to open a bank account or get a mortgage in another EU country just as banks can't directly trade with customers accross the EU without involvement of local regulators.
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This is not at all true.

Bunq B.V. is an entity licensed and regulated in the Netherlands. It provides deposit services to Irish residents on a passport basis. It does not need to have a physical presence in Ireland of any sort. Hence @podgerodge 's complaint is to the Dutch financial services ombudsman, not the Irish one. Likewise the Dutch DGS is providing protection, not the Irish one.

Lenders can also lend across borders without a physical presence. Most of them don't, but that's a different story.

Bunq is discriminating purely on the basis of the member state of residence of the account holder. From what I can tell there are no objective reasons for doing so as the cost of providing the service is the same, and bunq pools its deposits before lending them on so the revenues from the deposits are identical too.

For me this is a pure and simple breach of internal market rules but I welcome other opinions.
 
They can passport into Ireland but it's not as simple as for most other sectors. An online retailer can start selling to customers accross the EU tomorrow without any obstacles or involvement of national authorities. If it was that simple with banking more banks would be doing it.
 
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tomdublin said:
They can passport into Ireland but it's not as simple as for most other sectors.
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It really is that simple! A Dutch online bank in Ireland is doing nothing more than running a website. All the back end is done outside Ireland.

For example it's 10 times easier for Bunq to raise deposits in Ireland than it is for VW to sell cars in Ireland. The latter is impossible without a legal and physical presence, and pretty detailed knowledge of Irish tax and licensing regime.
 
@NoRegretsCoyote @Freelance @Brendan Burgess

Update on my complaint to Kifid regarding Bunq offering different interest rates in Ireland vs. other countries.

This has been going on a while now, back and forth, until Kifid changed their original decision not to accept my original complaint and allow me to proceed.

Last week, Kifid received this response from Bunq:

Reference is made to your letter of 16 October 2023 in which you ask bunq to reply to Mr. XXX’

complaint (“Complainant”).

At bunq we place great value on compliance with all applicable rules, including the EU non-discrimination rules. However, for the reasons set out below we reject the complaint raised by Mr. XXX.

1. bunq is not subject to the EU non-discrimination rules to begin with. Only the Member States are

bound to the EU’s fundamental freedoms (e.g., free movement of capital). Private firms can be

subject to the non-discrimination rule in Article 102 TFEU, but only if in a dominant position. bunq

is far from being dominant. bunq is a relatively new market entrant and its current share of the

total banking and finance market thus negligible, both in the Netherlands and even more so at EU

level.

2. Even if bunq were subject to the EU non-discrimination rules, it does not discriminate over interest

rates from one EU country to another. As has been explained to the Complainant before

(correspondence attached in Annex I) these are different markets and, consequently, bunq awards

different interest rates based on local market conditions, commercial and compliance reasons.

bunq has no control over the various (including socioeconomic, regulatory and legal) factors that

may influence the level of local interest rates (see e.g., Comparing bank interest rates across

countries | ECB Data Portal (europa.eu) and the competitive environment in which it operates.

bunq monitors local market conditions closely and it may adapt its approach to local interest rates

from time to time to ensure that its customers are getting the best possible deal (which, after all, is

in bunq’s own best commercial interest). However, bunq cannot be held liable for the fact that the

Complainant is located in Ireland, as opposed to e.g., the Netherlands, France or Germany where

different interest rates may apply at any given point in time.



3. In any event, for the reasons set out above the criteria applied by bunq when awarding different

interest rates in different markets, based on local market conditions, are objectively justified.

Please do not hesitate to contact us in case of any further questions.



Kind regards,

Legal Counsel

Bunq B.V

I have responded to Kifid, briefly stating that these points don't address the main part of my complaint - that Bunq is falsely trying to imply that the different rates are beyond its control, and that I will be happy if they simply remove this statement - “each country has its own set of rules and regulations (for example regarding taxes), resulting in different interest rates across Europe. As a bank we need to comply with those rules, which is why we maintain different interest rates in the Netherlands, Germany, France and other countries.”

Not holding much hope, but who knows, maybe the complaint in some tiny way fed into the decision by Bunq to bring the interest rates up for Ireland this week. Probably not though!
 
@podgerodge You’ve been very clear on the basis of your complaint from the outset. Well done on getting Kifid to overturn their original decision not to get involved. Hope you make further progress and I’v no doubt that cases such as this did influence their decision. The very fact that their latest response originates from their Legal Counsel would indicate that this has had high level visibility within BUNQ.
 
I'm still back and forth with KIFID. They have yet again asked Bunq to consider the points I have raised, but yet still come back to me asking "why do you think the information on their website is not correct", hence rince, repeat. I have also added helpful comments from other AAM users received by message, but I think that this is going to fall on simply whether they will ask Bunq to remove its assertion that it is local rules and regulations that prevent it offering higher rates to Irish customers.

I did add though, that the very fact that last week they started offering higher rates to Irish customers, proved my point that there were no such rules and regulations in the first place!!
 
@Freelance @Lightning and others

I received a communication from Kifid, stating they had a response from Bunq changing the text on their website. For reference, the original text was:
“We strive to offer our users the most competitive interest in all countries. Each country has its own set of rules and regulations (for example regarding taxes), resulting in different interest rates across Europe. As a bank we need to comply with those rules, which is why we maintain different interest rates in the Netherlands, Germany, France and other countries.”

Their response to Kifid states:

"I report on behalf of bunq that the web page about the interest rates has been adjusted: https://together.bunq.com/d/57157-update-to-massinterest-as-of-july-15-2023 . The website now displays the following text:
"We strive to offer our users a competitive interest in all countries where we operate. Each country however has its own set of rules, regulations and market conditions which result in different interest rates across Europe. The country where you are resident determines which of bunq's rates applies to you."
They follow on in their response to Kifid with:

"In view of the content of the complaint from Mr. XXX, the above change to the website, increasing the interest rate for Irish users and the requirement of a reasonable interest according to art. 3:303 BW, I request you to inform whether Mr. XXX wants to withdraw its complaint or Kifid can otherwise close the file.

If Kifid still wants to make a ruling, I request that you grant bunq a postponement for submitting a rejoinder until at least January 10, 2024, given my absence from Christmas until January 8, 2024."

FYI "Article 3:303 BW" is an article from the Dutch Civil Code meaning, according to Kifid when I asked, that you must have sufficient interest in your legal claim.

I feel like I am getting somewhere. It's a small piece of dubious language being used by Bunq, but at least they are finally making text changes. Interesting to see that they are now using their Irish interest rate increases as one of the excuses for me to withdraw the complaint.

I've responded to Kifid stating that the new text, which now includes "market conditions", and while it removes the 'which we need to comply with' piece, still clearly suggests things about rules and regulations and needs to be removed. Kifid have now gone back to Bunq.
 
@podgerodge

Excellent. Well done. They have clearly accepted your original point that blaming rules, regulations and taxes for differences in the interest rates being offered was nonsense. Some very significant changes to their original sloppy and inaccurate wording:

“the most competitive interest in all countries” becomes “a competitive interest in all countries”

“Each country has its own set of rules and regulations” becomes “Each country however has its own set of rules, regulations and market conditions”

“for example regarding taxes” removed

”As a bank we need to comply with those rules, which is why we maintain different interest rates” removed

Overall, these are significant and substantial change. They lay bare a number of inaccurate and misleading claims. Advertising and marketing of Financial Services is heavily regulated and the making of inaccurate and misleading claims should be and generally is viewed very poorly by regulators. Kifid should definitely go heavy on them for this.

Regarding the interest rate change, it is interesting to see that they mentioned the Irish interest rate change. Also that they left the 1.56% rate unchanged in other countries, e.g. France.
 
@podgerodge - Well done. With this type of process you have to persevere. Keep going.

"Market conditions" are not a valid excuse. There are no market conditions that justify Bunq treating Irish customers differently to customers of another country other than Bunq feel that they will get away with it in Ireland because the savings market is less competitive but that is not a justification to threat people of one country inside the EU differently.

I suggest that you ask Kifid to push Bunq to compensate Irish users for the period of time that they were paid less than other countries on the basis that it was discrimination inside the EU market with no valid reasoning.
 
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Just wanted to say amazing work, big fan, and it proved it works
 
@Lightning see above previous thing I posted, unfortunately it looks like they can discriminate on this particular issue. So I think I'm stuck with getting them to change language blaming factors other than their own decisions.
 
UPDATE - New response from Bunq - which Kifid are looking for my response on. They refer to a Central Bank 2007 report which specifically includes the words "Different regulations across euro area countries contribute to differences in interest rates". I'm no expert on what regulations could affect deposit rate offerings though.

I find their statement that interest rates are "out of bunq's influence", while simultaneously stating that "bunq has the freedom to set its own rates per country", a bit incongrous.

Funniest of all is their final defence that since they've now increased Irish rates, I no longer have a valid case!!!

I'm tiring of this, but am inclined to simply respond with - "bunq should remove the intransparent references to rules and regulations in their FAQ, and simply state (as per their website statement) that “The decision to raise interest rates for Personal and Business Savings Accounts is influenced by various factors, like market conditions for example.”

Any thoughts appreciated before I respond.

bunq does not share Mr. XXX’s point of view that its statements are inaccurate. bunq’s website states, on the subject of why its rate are different for residents in different EU countries: “We strive to offer our users a competitive interest in all countries where we operate. Each country however has its own set of rules, regulations and market conditions which result in different interest rates across Europe. The country where you are resident determines which of bunq's rates applies to you.”

1. This statement is a fair representation of the truth. National rules, regulations and market conditions do indeed affect the market interest rate in different eurozone countries. The Irish Central Bank among others, has said so in its first quarterly bulletin of 2007: “There are many reasons for the gap in interest rates between Ireland and the euro area. There is no ‘one way’ of doing retail banking in euro area retail financial markets. National market conventions differ widely on seemingly straightforward products such as overdrafts. Different regulations across euro area countries contribute to differences in interest rates.”

2. The market interest rate in a given country is therefore determined by factors out of bunq’s influence, such as rules, regulations and market conditions. bunq has the freedom to, and does in fact, set its interest rates per country and in part bases this on what is a good competitive interest rate for that county. bunq is transparent about this. On its webpage, bunq states on its decision to set the interest rates: “The decision to raise interest rates for Personal and Business Savings Accounts is influenced by various factors, like market conditions for example.” Therefore, bunq’s statement are neither misleading, nor are they intransparent. Its statements form a fair representation of the truth and the complaint should therefore be
dismissed.

Furthermore, bunq wants to point out that these types of policy and its statements on this subject are within its freedom to conduct its own policy. The complaint should also therefore be dismissed. Mr. XXX’s complaint should also be dismissed on procedural grounds, given that he has no reasonable interest in pursuing this complaint, since bunq has:

1. raised its interest rate for Irish residents to 2.46%, i.e. the same level which bunq pays to Dutch residents, as of December 7th 2023; and

2. changed the statements on its website as to what causes the interest rates differences
 
Raisin does the same. Irish Raisin customers can avail of significantly less attractive offers than their German counterparts. It's purely driven by the extent of competition in a given market.
 
@podgerodge

Because you are dealing with financial and regulatory institutions operating transnationally, you are better off to just deal with the issues as they impact you and not get caught up in deciphering the regulatory boundaries. Leave that to them.

If you stand back for a moment I believe you have achieved a lot more than you are giving yourself credit for. For three reasons:

Firstly, at the time of your complaint, BUNQ's stated reason for differential savings interest rates was
"We strive to offer our users the most competitive interest in all countries. Each country has its own set of rules and regulations (for example regarding taxes), resulting in different interest rates across Europe. As a bank we need to comply with those rules, which is why we maintain different interest rates in the Netherlands, Germany, France and other countries.”
This now reads:
"We strive to offer our users a competitive interest in all countries where we operate. Each country however has its own set of rules, regulations and market conditions which result in different interest rates across Europe. The country where you are resident determines which of bunq's rates applies to you."
This is a very real and very substantial change. BUNQ have, as borne out by this change, agreed or at the very least acquiesced. This in itself is a recognition by BUNQ that the wording was defective and that your complaint had substance and merit and KFID should endorse this by upholding your complaint.

Secondly, despite numerous opportunities to do so, BUNQ have failed to substantiate, either by way of real life examples or by arguing from first principles, either of the reasons given for differential savings interest rates; "set of rules and regulations (for example regarding taxes)" and " by various factors, like market conditions". Interestingly, had they said that Rates are different because we choose to operate different rates in different territories and can do so because there is nothing to stop us doing so they might well be in a better position, but this is not what BUNQ were saying at the time of your complaint. The are hiding behind a couple of vague expressions, which when given the opportunity to do so, they have failed to substantiate. In other words, no actual justification for discrimination has been provided.

Thirdly, on xxth December 2023 Bunq increased the savings interest rate on offer to its Irish depositors to exactly match the rate on offer to its Dutch depositors. This change was made in respect of its Irish Depositors only, and not in respect of its depositors in any other country. This again is tacit acceptance of the validity of your complaint, and an attempt to address and difuse the issue. And by raising this in their response, BUNQ have actually cemented the link between your complaint and their corrective action.

For the reasons above, and despite various assertions to the contrary, BUNQ have accepted the substance of your complaint and acted upon it. KFID should recognise this reality and uphold your complaint, together with recognising BUNQ's subsequent remedial action. KFID should also instruct BUNQ to make good the loss you suffered during the time you were discriminated against, or at the very least instruct BUNQ to offer you a good will gesture of discretionary compensation for the amount of your loss (calculate and state the amount).

I also think that this post by @NoRegretsCoyote is very relevant. If "BUNQ Ireland teoranta" was a bricks and mortar subsidiary with its own operations, infrastructure, costs etc then "market conditions" would cover a multitude and could be explained away. But it isn't. BUNQ.ie is nothing more than a translation of BUNQ.nl website. There is just one operation and one infrastructure behind it, totally detached from an "local market conditions".
 
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