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Avoiding Excessive Spanish Bank Charges

Spanish Legal IssuesPosted by Andrew Thu, February 02, 2017 15:31:27

January 5th, 2015

Since we covered this subject previously, there have been significant changes within the Spanish banking sector, principally to save failing Spanish banks. The Press has has then had a field day as directors’ dealings and conduct are scrutinised, with unsavoury findings.

But notwithstanding all this, there seems to have been little improvement- complaints of poor customer service and excessive charges are continually levelled at the remaining Spanish banks. This is particularly the case from non- Spanish account holders, who are used to free current account banking; and very modest fixed rate charges for electronic funds transfers.

Nearly all Spanish property owners are obliged to have a Spanish bank account, to pay property outgoings; and also to have a Euro banking facility, for general expenditure in Spain.

But invariably, they are shocked at the high charges for holding and operating a Spanish bank account. And then the real sting for Spanish bank customers can come when a funds transfer needs to be made, either in or out of a Spanish bank account.

Two cases have been referred to us recently- one where a client made a transfer from their Spanish Euro account to their UK Euro account (having sold their Spanish flat), and the Spanish bank sought to charge 1,000 Euros for the transfer. Another, where an inward receipt of Euro funds from a UK Euro account was charged at 300 Euros. Both cases involved major Spanish banks; and in both cases when challenged, the banks substantially reduced the charges.

It is curious that Spanish banks should purport to charge such high fees in the first instance; and then with little discussion, simply back down.

The first issue is quite straightforward. UK nationals in particular, are accustomed to fairly modest fixed fees (or even zero cost) when making electronic payments; and routinely zero cost for electronic receipts of funds. In Spain however, when the electronic transfers are international, (even transfers in Euros), the default position in many cases, is for the bank to try to charge on a percentage basis, rather than a fixed fee.

Clearly this is commercially unjustifiable; as the process/ cost to the bank is identical, whether the transfer is for 10,000 Euros or 1,000,000 Euros. So logically, a standard fixed fee should be applied.

And also, the implementation of the SEPA (Single Euro Payments Area) European Union Regulations, is certainly a helpful factor for Spanish bank customers who are concerned about high charges.

In Regulation 924/2009, the European Parliament decreed in particular, that charges for electronic payments between EU member states (of up to 50,000 Euros) must not exceed the applicable charge for an equivalent national transfer.

As national transfer charges are very much lower (and generally zero for electronic receipts) the SEPA Regulations should be introduced into the discussion with your Spanish bank as to applicable charges, before any significant transfer into or out of your Spanish bank account is authorised.

Quite possibly for larger funds transfers, (and depending on the bank account terms) splitting the payments into smaller amounts (sub- 50,000 Euros) can considerably reduce the charges. Indeed, the most PR conscious Spanish banks are already including in their standard terms, free transfers for up to 50,000 Euros within Europe, waiving even the limited fee they would otherwise be entitled to charge under the SEPA Regulations.

These are very positive developments for Spanish bank customers; but during this process of realisation/ change, it remains necessary to discuss and negotiate charges with your Spanish bank before authorising significant funds transfers, so as not to be caught by the bank’s default charging structure.

If necessary, new bank account opening in Spain is now easier than ever before. A small amount of research and paperwork can lead to huge savings, by moving to an alternative Spanish bank that offers competitive charges as a standard feature.