Fine imposed on AB DNB Bankas for unreasonably high fees for some cross-border transfers
The Board of the Bank of Lithuania has imposed a fine on AB DNB Bankas for the application by this bank of unreasonably high fees for some cross-border transfers and for the crediting of the funds of such transfers, thereby violating the requirement of EU regulations to apply to such transfers a fee not higher than that for corresponding national payments. The Bank of Lithuania obligated AB DNB Bankas to reduce the fees and indemnify losses for customers. AB DNB Bankas reduced the fees to the required ratios and reported as having indemnified losses to customers.
The Board of the Bank of Lithuania, after addressing AB DNB Bankas customers’ complaints about the fees for the crediting of cross-border funds transfers, identified that in some cases (when the transfers did not meet SEPA requirements) the Bank applied a EUR 8.69 fee for the crediting of the funds of such transfers, i.e. almost 25 times more than for the crediting of domestic transfers in euro (EUR 0.35). In addition, when a bank in another European Economic Area country is not connected to the SEPA payment systems and is unable to accept SEPA transfers, AB DNB Bankas had set for transfers a fee much higher than for national payments: at a Bank's branch — EUR 14.48 (for national payments — EUR 2.03), online — EUR 11.58 (for national payments — EUR 0.35). In these cases AB DNB Bankas has violated the regulation of the European Parliament and of the Council concerning international payments within the Community. This legal act prohibits the application by banks of a fee for cross-border payments in the EEA (EU countries and Iceland, Lichtenstein and Norway) higher than that applicable to the respective payments and their crediting domestically. AB DNB Bankas substantiated its applicable practices by that, in processing cross-border payments, which are received at or sent from banks that are not connected to SEPA payment systems, the Bank bears additional costs due to the processing of such payments and fees payable to correspondent banks.
According to preliminary estimates, due to the application of the heightened fee, AB DNB Bankas’ customers have incurred more than EUR 82 thousand in losses for almost 14 thousand operations. Taking into account that, due to the unreasonably high fees, a significant group of customers has borne financial losses, the Board of the Bank of Lithuania on 13 August 2015 imposed a EUR 3, 0000 fine on AB DNB Bankas, obligated it to immediately terminate the application of the heightened fees and indemnify losses to customers, i.e. to pay back the differential of the paid commission fee to all customers to whom a higher fee for cross-border transfers was applied from 1 January 2015. AB DNB Bankas has informed the Bank of Lithuania of having reduced the fees on 22 August and compensated losses to all customers until 2 September.
The Bank of Lithuania has checked the publicly announced fees of other banks too. No cases of the application of fees for cross-border payments not in line with legal acts were identified.
Under the Law on Payments, the minimum fine for such a violation can reach EUR 289, maximum — EUR 8,688.