Brits in EU risk losing UK bank accounts ‘within weeks’

Some of Britain's biggest banks have begun contacting customers in European Union countries, warning them that their accounts will be closed down within weeks because the cost and complexity of operating without a continuation of pan-European banking rules is too much.

Brits in EU risk losing UK bank accounts 'within weeks'
Lloyds Bank expects to close at least 13,000 accounts. Photo: Lloyds Bank
According to a report in The Times, thousands of Britons who live in Europe face being stripped of their UK bank accounts and credit cards, because of the UK government's failure to agree rules for operating after Brexit. 
Each of the EU's 27 member states has different rules for cross-border bank accounts which will start to apply immediately the UK's transition period ends on 31st December 2020. 
“In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense,” a source at one British bank told the newspaper. “This is passporting — this is the reality of Brexit.”
If a way is not found to continue pan-European banking rules, or passporting, UK banks will br breaking the law if they don't apply for new banking licenses in each European Union Country. 
Lloyds, Britain’s biggest banking group, began writing to customers in August, warning them that their bank accounts would  close down on December 31.
The bank estimates that 13,000 customers, including those based in Holland, Slovakia, Germany, Ireland, Italy and Portugal, would lose their accounts. 
“If customers have regular deposits into, or payments out of, their account, they will need to make other arrangements before their account is closed,” the bank said. 
Barclays and Coutts have also started contacting customers. 
“In light of the UK leaving the EU at the end of 2020, we continue to review the services we offer to customers within the European Economic Area (EEA), and any impacted customers will be contacted directly,” Barclays said in a statement. “The timings for account closure will depend on the type of product that a customer holds, but we will always give notice to customers.”
“In the event that no alternative to the European Economic Area passporting regime for financial services is agreed between the UK and EU, we have taken the difficult decision to withdraw from offering our services to clients who reside in the EEA,” Coutts said. 

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Danish banks lower charge for customers who make purchases abroad 

An order went into effect Wednesday requiring Danske Bank and Nordea to charge customers less when paying in foreign currencies. 

Danish banks lower charge for customers who make purchases abroad 

Customers at Danske Bank and Nordea will now pay a lower charge when they use their bank-issued debit card – referred to as a Dankort – to make purchases when abroad.

Earlier this year, the Competition Council (Konkurrencerådet) determined both Danske Bank and Nordea added unreasonable surcharges to purchases abroad — 1.5 percent within the EU and 2 percent for the rest of the world. 

As per the Competition Council’s findings, Danske Bank must drop the currency exchange surcharge altogether within the EU and reduce the rate to 1.5 percent outside the bloc, broadcaster DR reports on Wednesday.

Nordea has changed its surcharge from 1.5 percent in the EU and 2 percent in the rest of the world to 1 and 1.5 percent respectively.

Danske Bank opposes the Competition Council ruling. The bank has appealed the decision and will argue its case before a judge at the Copenhagen District Court. No date has yet been set for a hearing.

“Although we don’t agree with the council’s decision and have appealed the case with the courts, this is a case of an order by an authority, which we have to comply with by the set deadline,” Danske Bank head of media communications Stefan Singh Kailay told DR via email.

“That is exactly what we have done with the price changes of August 1st. That does not change our view of the ruling,” he wrote.

“(The council) is focusing on one element of the overall payment transaction and the level of profit on that alone, and not on the overall cost of the Visa-Dankort service. This creates a misleading picture of what we actually earn from the cards,” he wrote.

The currency exchange surcharge is applied as a percentage of the amount you pay with your card in a foreign currency, such as in foreign shops, hotels or restaurants as well as on websites.

Nordea, which has also reduced its surcharges, has also appealed against parts of the ruling according to DR.

“We do not think we have charged too much in this area, but conversely have – in good faith – set our prices in a free, competitive market. We have full transparency with our customers in this area,” the bank’s head of media communications Stine Wind told DR via email.

“Every time you complete a payment in a foreign currency with your card, you can see how much you pay as currency exchange surcharge in our Wallet,” she added.

READ MORE: Danish banks raise interest rates but many remain negative