Financially fragile client and the bank's responsibility

Faced with the increase in the cost of energy as well as ever-increasing inflation, the start of 2023 is largely marked by the financial difficulties of many households. Banking customers qualified as financially fragile are at the heart of all attention.

1.  “I will say of money what they said of Caligula, that there had never been such a good slave and such a wicked master”1, said Montesquieu in his time. However, it is clear that money remains in our time the main source of conflict between consumers and banking institutions. Consumers are, in most cases, people who are unaware of banking practices and rules. The Consumer Code defines the consumer as "any natural person who acts for purposes that do not fall within the scope of his commercial, industrial, craft, liberal or agricultural activity".

2. European Union law also falls within this definition since Directive No. 2011/83/EU of the European Parliament and of the Council specifies that the consumer is characterized as being "any natural person who, in contracts falling under this Directive, is acting for purposes which do not fall within the scope of his commercial, industrial, craft or liberal activity.

3. Some consumers may benefit from being labeled as “uninformed”. This is particularly the case when concluding a loan (consumer or real estate), since case law states that, in such a situation, the bank must check whether the natural person customer is "an uninformed borrower".

4. Except in the case of credit, the consumer is described as layman compared to the professional. In practice, the consumer only rarely has any knowledge, in particular of banking law.

5. On average, the specific banking offer is little known to the French population (39%) and only 30% of households living in poverty

6. In addition, only 4% of recipients of a social minimum as well as 2% of households in a situation of poverty have actually subscribed to a specific offer for financially fragile customers.

7. This lack of knowledge means that the consumer feels a serious reluctance to assert his rights against his banker. Banks are well aware of the reputation they enjoy with a clientele of individuals who are not familiar with the customs and rules of the banking profession. 

The banking community knows full well that this type of clientele will be tempted to believe too timidly in their legal chances when faced with the banks' dedicated services. When consumers act alone to assert their rights in terms of legal caps on bank charges, they face serious nervousness from their banker, who does not hesitate, depending on the situation, to retort to them the inadequacy of the rules in vigor to their situation. 

The maneuver inevitably succeeds, and this in the majority of cases, pure and simple abandonment of their approach by the consumers concerned. Because of their lack of knowledge of banking law, they allow themselves to be persuaded that the bank is in its most perfect right and that any action or attempt at amicable or legal action would be futile. Few of them decide to stand up against the behavior, which could not be more feverish, of their bank.

8. Faced with a clientele in a situation of financial fragility, the bank too many times fails to present an appropriate offer, which nevertheless constitutes a legal obligation, as will be detailed later. When consumers are determined to assert their rights with their bank, they come up against responses whose content is unsuitable. 

Indeed, in its response letter addressed to its client in a situation of financial fragility, the bank mentions, as the only solution, to contact its complaints department at the regional level and, failing to obtain a satisfactory response from the latter, to enter the mediator specific to the bank. 

However, however layman the consumer is when faced with such procedures, he is all too often satisfied with these indications as the only response to his complaint.

9. If the financial fragility of a section of the banking clientele unfortunately cannot be detached from the financial and consumerist behavior of consumers, the banks are not for all that authorized to circumvent the legislation in force. However, they do not deprive themselves of this when it comes to financially fragile customers. In fact, the vast majority of banks do not respect their legal obligations with regard to this type of clientele.

10. As will be detailed later, a specific banking offer must be offered to each financially fragile customer. This dedicated offer has certain advantages in favor of the consumer, which is really not to please the bank. If her client opts for this offer, she can no longer freely charge certain bank charges. 

Very low ceilings are put in place, thus preventing the bank from reaping certain profits from the most financially fragile people. It is for this reason that banks rarely present the offer in question to their eligible customers. They only do so when they request it, which is currently very rare, or at the request of a consumer defense association or a lawyer.