Refused or closed business account – what can you appeal?

The bank's decision is not necessarily beyond challenge. Norwegian businesses have a statutory protection when they ask for ordinary payment services. But the protection is weaker on termination of an existing business relationship than many assume, because several provisions of the Financial Contracts Act can be set aside in a bank's business terms.

Can a bank refuse an AS a business account?

Section 4-1 of the Financial Contracts Act says a payment service provider cannot refuse to provide payment services on ordinary terms without proper cause. That provision cannot be departed from to the detriment of a business customer. That does not mean a company is entitled to every banking product. The right covers payment services the bank actually offers on ordinary terms, and does not in itself give a right to a loan or a credit facility. The bank can also refuse where the anti-money-laundering requirements cannot be met.

High risk is not automatically enough

The fact that a customer means more due diligence work does not on its own mean the bank can refuse freely. Finanstilsynet emphasises that financial undertakings have a duty to contract with business customers too, and that a relationship cannot be refused merely because the due diligence is resource- or cost-intensive. A specific risk assessment has to be made. At the same time the bank may have proper cause where the required due diligence genuinely cannot be carried out.

What if the bank has already closed the account?

For existing accounts the starting point in section 4-43 of the Financial Contracts Act is that the bank can terminate an open-ended account agreement where the agreement provides for it and there is proper cause. The Act's default is written notice with reasons at least two months before the agreement ends. In certain serious cases it can be ended immediately. For a business customer, though, that provision can be departed from. The account agreement may contain different rules on grounds and notice periods, so always get out the specific business terms before you complain.

What if the bank points to the Anti-Money Laundering Act?

Then a second set of rules applies on top. The bank has to follow the customer on an ongoing basis and understand the business, the risk profile, the transactions and the source of funds. Where the required due diligence cannot be carried out, section 24 of the Act says the relationship is to be ended. Even so, everything does not have to close at once. The regulations allow the bank instead to limit or block particular products and services, and ending basic services has to be considered separately. That can be an important ground of complaint where the bank has gone straight to full termination.

Are you entitled to reasons?

Where a financial service is refused, the customer should as a starting point receive a written answer with reasons. The same applies on termination or cancellation. But the bank may be legally prevented from explaining everything. The Anti-Money Laundering Act contains a prohibition on disclosure which among other things forbids the bank from telling the customer that it is investigating possible money laundering, or that something has been reported on. That is why otherwise lawful reasons can appear short or unspecific in some cases.

Complain to the bank first

The first step is a written internal complaint. The Financial Contracts Act requires financial undertakings to have appropriate and effective procedures for handling customer complaints. A good complaint gathers the important points in one place: which refusal or termination you are complaining about, what you want the bank to do, why you say the decision lacks proper cause or rests on incorrect facts, what information the bank asked for and when you provided it, a short timeline, documentation of the business and its ownership, and the relevant provisions of the bank's own business terms. Do not send a SAF-T file or the whole accounting archive automatically. Answer precisely the questions the bank has actually asked.

How quickly does the bank have to deal with the complaint?

The Financial Contracts Act's starting point is that the bank must reply in writing as soon as possible. If there is no final answer within 15 working days, the Act's default rule is that the bank sends an interim reply explaining the delay and stating when a final answer will come. In extraordinary cases the period can be extended to 35 working days. For business customers some of these details may have been set aside in the bank's agreement. The requirement to have effective complaint procedures cannot be contracted away.

Can a limited company complain to the Finance Complaints Board?

No. Finansklagenemnda, the Norwegian Financial Services Complaints Board, states expressly that it handles banking and finance complaints from consumers only, and does not take cases from businesses. A company refused a business account or losing its banking relationship therefore cannot use Finansklagenemnda as an ordinary appeal body. You can tip off Finanstilsynet if you believe the bank's practice may breach the rules. But Finanstilsynet is not an appeal body for the specific dispute and cannot give the business a binding decision against the bank.

What is left if the bank stands by its decision?

For a business customer there is currently no general external banking complaints body equivalent to Finansklagenemnda. If the internal complaint does not succeed, the business normally has to choose between banking elsewhere and considering court proceedings. In an acute situation, applying to the district court for an interim injunction may be an option. It is not enough that the account closure is inconvenient or expensive, though. The business has to show both the underlying claim against the bank and a need for interim protection. This is a legal route to weigh up with a lawyer.

This is general guidance, not advice on your specific case. Deadlines, rates and amounts change – always check the current rules, or get in touch with us.

Is it urgent?

We can work out what actually has to be done, what documentation exists and how quickly it can be sorted. You can also reach us in the evenings and at weekends.

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