21 Sep 2010

French banks fined for collusion on cheque fee

9:42 am on 21 September 2010

Eleven banks in France have been fined 384.9 million euros ($US504 million) for colluding to fix the price they charge for handling cheques.

The Autorite de la Concurrence said they charged an unjustified fee of 4.3 cents on 80% of cheques exchanged in France from January 2002 - July 2007.

It added that the banks were still charging two additional fees for "related services" that were not proportionate to the costs incurred.

The BBC reports the banks include BNP Paribas and HSBC. The others are Banque de France, BPCE, Banque Postale, Confederation Nationale du Credit Mutual, Credit Agricole, Credit du Nord, CIC, LCL and Societe Generale.

The competition agency said the banks put up their fees during the transition towards the new digital system for processing cheques.

The banks argued that they had to compensate for a loss of revenue, because they had to release the funds for the cheques sooner than under the previous system.

But the agency said there was no evidence that the transition to the new system had resulted in net losses for the banks involved.

It noted that the banks stopped charging the 4.3 cent commission in 2007.