Eleven French banks fined €384m

France’s competition authority said yesterday it had fined 11 big French banks €384 million for imposing an unfair commission for handling customer cheques.

In 2002, the banks introduced a €0.043 commission per cheque, arguing that it was necessary to compensate for a loss of revenue which came after the cheque processing system was speeded up.

The banks said they were losing out on interest payments because they had to release the funds for the cheques sooner than under the previous processing system.

But the competition authority said in a statement that after conducting an inquiry it had concluded the commission charged was unjustified.

It noted that the banks stopped charging the commission in 2007 because of the “pressure of the inquiry.”

The BPCE banking group was hit with the biggest fine, of €90.9 million, followed by Credit Agricole, which was fined €82 million.

The other banks fined were Société Générale, BNP Paribas, Credit Mutuel, Credit Industriel et Commercial (CIC), Credit du Nord, LCL, La Banque Postale, HSBC and the Bank of France, the central bank which supervises the lenders.

The banks have one month to appeal the decision. Contacted by AFP, most said they had yet to take a decision on whether to do so.

A spokesman for BNP Paribas, however, insisted that the charge had been imposed in a transparent way and that it had paid for “a reform that contributed to the modernisation and security of payments by cheque”.

The authority admitted that it was difficult to calculate precisely how much customer money had been wrongly appropriated from customers, but that it estimated the sum to be around €220 million over the period concerned.

Thereafter, the fines imposed on each bank were determined by their relative shares of the markets, except in the case of Credit Mutuel, which was given a lesser €3 million sanction.

“It’s a good decision for consumers,” said Reine-Claude Mader, chairman of the consumer pressure group CLCV, adding that the case underlined the need for stricter legislation covering banking charges.

Banking consumer groups are to meet Finance Minister Christine Lagarde on Thursday at her ministry to press their case for a law to enforce transparency in banking charges.

Ms Lagarde has in the past accepted that some rules have to be changed, but the government has thus far resisted calls for formal legislation.