Why does N26 block accounts?
Blocking and closing accounts is an important part of what N26 must do as a bank to help combat financial crime.
2 min read
Every bank has an important duty to combat financial crime, and N26 is no different. As a fully-regulated bank, this is not just a responsibility, but a legal requirement for us to do so.
At N26, we take this extremely seriously, as it most crucially helps keep the funds held in your N26 account safe and secure.
We do this in a number of ways, using automated systems, specialized teams and machine learning to monitor for activity within our base. N26 regularly conducts routine checks on our millions of customer accounts to detect suspicious activity or misuse of accounts, which allow us to monitor and flag suspicious activity or misuse where it may exist.
N26 is required by law to report any suspicious activity we find to the German Financial Intelligence Unit by filing a Suspicious Activity Report (SAR). This is because we hold a full German banking license, and are governed by Germany’s Money Laundering Act, which outlines clear requirements for all banks to report all potentially fraudulent or criminal activity.
Sometimes, our findings may require us to block accounts. We always aim to return any customer funds as soon as possible as long as these can be released.
Our teams will always strive to minimize any disruption while following the processes required of us. Unfortunately, during this period, our customer service teams are prohibited from sharing information on the account in question - even to the account holder themselves. This is because banks can only disclose why an account may be blocked or closed to the relevant authorities. While it is understandably frustrating, this legal requirement has a practical reason - to prevent cybercriminals from being tipped off on the nature of the investigation while law enforcement officials do their work, and to stop fraudsters from using this information to evade detection in future.
On occasion, we may wrongly identify a legitimate customer as a potential fraudster, as the evidence found by our anti-financial crime teams may not be absolutely clear. Sometimes, we may require more information to make a fuller assessment, and will reach out to request this. In many cases, we have to make a decision and judgement based on the information we have.
While it isn’t possible to get this right 100% of the time, our teams will strive to help customers resolve these cases as quickly as possible, and will continue to dedicate their time and efforts into assessing each case to ensure we minimize the margin for error, while doing all that we have to to combat crime.
As the face of financial crime and online fraud is constantly evolving, N26 is continuing to invest even more in our efforts to fight online fraud and financial crime in the digital space, so that we can keep updating our systems to detect suspicious activity online, even as people’s habits evolve.
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