French banks fined $503 million for unfair cheque fees
21 Sep 2010
The French competition authority yesterday fined 11 major banks €384.9 million ($503 million) for charging unjustified fees during transaction towards a new digital system of cheque processing, the regulator said in a statement yesterday.
The penalised banks include French central bank Banque de France, banking giants BNP-Paribas, Credit Agricole, BPCE, and Societe Generale. Other infringers are Banque Postale, Credit Mutuel, Credit du Nord, Credit Industriel e Commercial (CIC), Credit Agricole subsidiary LCL, and HSBC.
The fines include €381.1 million for unjustified cheque processing charges, and €3.8 million on account of fees for 'related services.'
The banks have been charged for collusion during the transition to a new digital system for interbank cheque processing during the period from January 2002 to July 2007. These banks charged an unjustified €0.043 fee on 80 per cent of the cheques exchanged in France.
The fee was charged at each operation and paid by the remittent bank to the drawee bank. The banks discontinued the fee in 2007, when the competition watchdog's investigation reached a decisive stage.
These banks have also enforced two additional fees for 'related services' which are continued even today. The regulator ruled that these fees are not proportionate to the costs incurred by the banks and ordered its revision.
