Frankfurt - Court: Account freezes on suspicion of money laundering too long
Due to the Money Laundering Act, bank customers sometimes have their accounts blocked for weeks without giving a reason, according to the courts. Since the end of 2021, the Frankfurt Regional Court has received an increasing number of urgent applications for a temporary injunction with which account holders want to get their bank to reopen the account, reported Regional Court President Wilhelm Wolf on Thursday.
In 2023, there were around 40 such cases in Frankfurt alone, all from one - unnamed - bank. The threshold at which such a "suspicious activity report" is triggered is now very low, Wolf said: a deposit of around 10,000 euros. According to the Money Laundering Act, the suspicious case must be investigated within three days, but this usually takes several weeks. According to Wolf, the banks conceal this with so-called deadline notifications. During this time, customers can neither withdraw money nor are standing orders debited.
Wolf finds it "problematic in terms of the rule of law" that banks do not have to give customers their reasons for blocking and that the court is then also obliged to remain silent. By the time the court has found out the reasons from the bank, the account has often been unblocked. However, the customer remains liable for the costs of the proceedings, as the Money Laundering Act contains an "exemption from liability" for the banks.
Wolf assumes that such cases will become more frequent in the coming years. He sees a need for improvement in the exemption from liability. In addition, the parties involved in the proceedings must be granted the right to be heard.
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- The 'Frankfurt Regional Court' has seen a surge in urgent applications from bank customers in Frankfurt on the Main, seeking to reverse account freezes under suspicion of money laundering.
- Banks in Hesse, particularly one unnamed institution, have been blocking accounts for weeks without providing reasons, a practice criticized by Regional Court President Wilhelm Wolf as problematic for the rule of law.
- According to Wolf, the 'Money Laundering Act' requires banks to investigate suspicious activity reports within three days, but this rarely occurs due to prolonged internal procedures and 'deadline notifications' from the banks.
- As a result, bank customers in Frankfurt, subjected to account blocking, are left unable to withdraw funds or have standing orders debited, while being held liable for legal proceedings' costs under the 'Money Laundering Act.'
- The Frankfurt Regional Court President, Wolf, advocates for improvements regarding banks' exemption from liability in such cases and calls for the right of all parties involved to be heard during proceedings, as he expects the number of similar cases to increase in the future.
Source: www.stern.de
