I have savings and other bank accounts: a four-step compensation process

Created on 02 September 2020
Description

The compensation process is initiated as soon as the “unavailability of deposits” is declared by the Prudential Supervision and Resolution Authority (ACPR i). 
Within a maximum of seven working days after the bank is declared as having failed, the FGDR opens a “Secure Compensation i Area”, SCA, on its institutional website, www.garantiedesdepots.fr
All customers who have provided an email address or mobile phone number to the failed bank are informed by text message or email that the SCA has been opened.  After an authentication and identification phase, they can choose their desired payment method: transfer to a new bank account or cheque.

Sommaire

Please ensure as quickly as possible that you have a bank account available at another bank where you can receive your compensation and transfer your transactions.
 
For customers who have provided only a postal address to the bank, compensation is automatically and immediately sent by cheque since this lack of contact details means they cannot be registered on the SCA.  
 
Customers who have not chosen a payment method via the Secure Compensation i Area (SCA) within 20 working days of the date on which it was opened also receive their compensation by cheque.

Under what circumstances are you compensated by the FGDR?

  • When your assets have become “unavailable”, the FGDR intervenes at the request of the Prudential Supervision and Resolution Authority (ACPR i). 
  • The ACPR and the FGDR officially announce the bank’s failure through the media and by informing the bank’s customers. 
  • From the date on which the institution is declared as having failed by the ACPR, you lose access to your accounts and your compensation is initiated automatically, without any prior action on your part. You will receive a final bank statement from your bank as of the deposit unavailability date declared by the ACPR and the FGDR will calculate your compensation on that basis. 

Deposit guarantee scheme: a four-step process

When a bank is no longer able to return the sums entrusted to it by its customers, the ACPR i notes the bank's failure and contacts the FGDR. The FGDR is initiated on the “unavailability date” and compensates customers in an amount of up to €100,000 per customer, per institution, as well as Livret type “A”, “LDDS” and “LEP” savings accounts guaranteed by the French government, within a maximum of seven working days. 

 

Step 1: initiation at the request of the ACPR

  1. The process is initiated when the ACPR determines that the bank in question is no longer able to return its customers' funds. The deposits become “unavailable” on a date which the ACPR declares as the “unavailability date”. 

  2. This is the date on which the bank is closed for all practical purposes, since customers lose free access to their accounts. The ACPR then contacts the FGDR to compensate the customers. 
     

  3. The institution must immediately suspend all its activities and is then quickly declared as having failed
     

  4. On this date, the final customer account statements are calculated. This date also marks the start of the seven working day period during which the FGDR must compensate customers for their savings and other accounts. 

Customers must have an account at another bank which can be used to receive their compensation and transfer their regular banking transactions. 
No more than seven working days after the unavailability date, the FGDR will open a “Secure Compensation i Area (SCA)” on this website for customers of the failed bank.

Step 2: preparation of compensation, customer account statement and forwarding of information to the FGDR

 

  1. On the “unavailability date”, the bank prepares each customer’s account statement, which includes the transactions completed as of that date (for example, cheques, debit card transactions, etc.) as well as interest or remuneration due. 

  2. It then sends this electronic file of the final customer account statement to the FGDR. The FGDR performs a technical verification of the files and, on that basis, determines the amounts to be compensated. 

  3. It prints a final bank account statement and sends it to each customer. 

  4. During this time, the FGDR informs the public of the status of the process on its website and answers questions via its call centre.
     

Customers are strongly advised to notify their bank whenever there are changes in their personal situation or contact information, such as name, postal address, email address and landline and mobile phone numbers. 
 
It is important to update this information at all institutions at which accounts are held in your name or that of your family members.
 
Compensation sent by the FGDR to an old postal address may be returned to it, and the FGDR may be unable to contact the customer again in order to pay the compensation.

Step 3: availability and payment of compensation

  1. Within a maximum of seven working days, the FGDR opens a “Secure Compensation Area” on its website www.garantiedesdepots.fr to provide compensation for each customer:

    • by bank transfer, if the customer enters the details of a new bank account in the Secure Compensation Area; 

    • or by cheque with acknowledgement of receipt.

  2. Regardless of the payment method chosen, the FGDR prints a compensation letter which includes: 

    • information about the customer's accounts;

    • a list of covered accounts and excluded accounts;

    • the compensation calculation;

    • the non-compensated amounts;

    • the payment (bank transfer or cheque), where applicable;  

    • a "Compensation by the FGDR" information notice.

      - Customers who have provided their bank with an email address or mobile phone number will receive a personal message once the Secure Compensation Area (SCA) is opened so that they can log on to it. 
      - Only customers who have provided their bank with an email address or a mobile or landline phone number will be able to access the SCA. 
      - Customers who have provided only their postal address will not be able to access the SCA. They will automatically be compensated by cheque without needing to take any other action. 
  3. During this time, the FGDR's Call Centre is available to answer questions or contact customers.

  4. This period may be extended only in cases where additional information or special processing is required.  

  5. The customer then has two months to send the FGDR any requests for additional compensation on the basis of “Temporary High Balances” or to dispute their compensation, with the necessary supporting documents. 

 

Step 4: Special cases 

  1. After the seven-day period during which most customers are compensated, the FGDR continues to process special cases, additional compensation and claims until they are completed. 
  2. It opens a Processing Centre with operators trained in additional compensation procedures: 
    - claims relating to temporary high balances;
    - processing of accounts with beneficiaries to allow final recipients to receive compensation; 
    - processing of accounts of deceased individuals; 
    - etc.
  3. Exchanges with customers continue through the Secure Compensation Area via the secure messaging or document exchange function or by post. The telephone call centre remains available as necessary. 

Further action by you

How do I claim additional compensation for temporary high balances or dispute the FGDR's compensation decision?

An “FGDR claim form” is available in the FGDR’s Secure Compensation i Area or can be requested from the FGDR by letter. This form should be completed and sent by registered post with acknowledgement of receipt to the FGDR, 65, Rue de la Victoire, 75009 Paris (France) along with all supporting documents that you have for establishing your rights (bank account statements, contracts, notarial acts, etc.).

The FGDR issues its compensation decision through the compensation letter (letter, bank account statement, information notice and payment, where applicable) downloaded from the FGDR's Secure Compensation Area or received by registered post with acknowledgement of receipt.

  1. You must submit an informal claim to the FGDR within two months of the date of acknowledgement of receipt or the download date of the last letter received, by which the FGDR closes your compensation.
  2. The FGDR's new decision regarding your informal claim may then be disputed before the Paris Administrative Court - 7, Rue de Jouy, 75181 Paris Cedex 04 (France) within two months of the date of the FGDR's second decision. For an appeal brought before the Administrative Court, representation by a lawyer is mandatory.
Section

What should I do about deposits not compensated by the FGDR?

  1. You do not need to take any action for:
    • the portion of your current or savings accounts with a credit balance covered by the French government guarantee that exceeds the €100,000 compensation ceiling and is therefore not compensated by the FGDR;
    • the portion of your accounts with a credit balance covered by the deposit guarantee scheme that exceeds the €100,000 compensation ceiling or the increased ceiling in case of “temporary high balances”. These amounts represent a claim that you have against the liquidation of the bank and are shown in the compensation statement on the line “Portion of the basis of compensation exceeding the compensation ceiling and not covered by the deposit guarantee scheme”.

      => The FGDR declares all these claims to the liquidator i on your behalf. 
  2. You must submit a "claim declaration" to the liquidator to claim repayment in the following cases:
    • you have deposits and products not covered by the deposit guarantee scheme. For example, these may include cooperative investment certificates of the failed bank or deposits that were provided as security and remain unavailable. The list of your accounts not covered is shown in the compensation statement on the line "Summary of accounts and deposits not covered"; you should check that the amount on this line is correct and verify the existence of other claims that you may need to declare to the liquidator;

    • you have deposits that are not shown in your compensation statement as a result of ongoing transactions or in case of a dispute with the failed bank;

    • you are not eligible for the deposit guarantee scheme.
       

Important note: you should check that the claim amounts declared by the FGDR to the liquidator on your behalf are correct and verify the existence of other claims that you may need to declare to the liquidator.

How do I submit my claim declaration to the liquidator?

  • You must send your claim declaration to the liquidator i  by registered post with acknowledgement of receipt. This document must describe your claim in detail and be sent along with all supporting documents that you have for establishing your rights (bank account statements, contracts, etc.).
  • The liquidator is appointed by the Commercial Court. The contact information for the liquidator and the court and the date of liquidation proceedings are published on the FGDR's website in the “News - Interventions in progress” section.
  • You must submit your claim declaration within two months of the publication of the decision to initiate court-ordered liquidation i proceedings in the Official Bulletin i of Civil and Commercial Announcements (BODACC) and in a journal of legal notices. 
    Lexique : Official Bulletin of Civil and Commercial Announcements (BODACC)
  • If you have not submitted your claim declaration within this time period and you can show that the late declaration is not of your own doing, you may file an application for “relief from the effects of expiry” with the official receiver of the Commercial Court within six months of the date of publication in the BODACC of the decision to initiate liquidation proceedings.
     

What happens with banking transactions that could not be recorded before the day of the failure?

Several instances may arise for which your institution will let you know how to proceed. You will need to submit a claim to your bank along with the necessary supporting documents to cancel these transactions. 
Below are a few examples.  
 

You deposited cheques or cash at your branch during the hours or days preceding the failure which were not shown on your final bank statement. Submit the cheque or cash deposit slip so that the institution can cancel or repay this deposit.
You were expecting the transfer of your salary during the hours or days preceding the failure. Inform your employer. Then send your employer the new bank account details. 
Provide your new bank account details to all organisations that make automatic bank transfers (benefits office, social security, mutual insurance, etc.).