In the EU, courts and regulators have pointed out banks’ overcompliance on three occasions. What should customers do?
People whose accounts have been frozen can cite court rulings and decisions by regulatory agencies. But that won't be a panacea.
In Europe, there have already been at least three cases involving Revolut, OTP Bank, and Luminor, in which regulators and courts ruled in favor of customers due to overcompliance / Photo: Aleksandrs Karevs/ Unsplash
In Europe, there are at least three known cases in which courts or regulators have ruled in favor of customers whose bank accounts were suddenly frozen. While these are isolated cases for now, lawyers surveyed by Oninvest believe that their number may grow over time, forcing banks to reevaluate their compliance practices. Will existing rulings hold up in a dispute with a bank?
The Revolut Case in Italy
In April 2026, Revolut, Europe’s largest neobank, received three fines totaling €11.5 million from Italy’s Autorità Garante della Concorrenza e del Mercato (AGCM), the agency responsible for competition and consumer protection. Of this amount, €5 million was for “aggressive methods” of imposing restrictions and blocking customer accounts. According to the regulator, Revolut’s parent company, Revolut Group Holdings (London), and its European banking subsidiary, Revolut Bank UAB (Lithuania), did not notify customers in advance of the impending restrictions, did not give them the opportunity to respond to the claims, and did not provide adequate assistance after the restrictions were imposed. Having lost access to their account funds, customers were unable to meet their obligations or use the money for everyday and urgent needs, the AGCM states.
The AGCM is not afraid to fine large companies, including Apple, Google, and Amazon. “They have the political will and resources to see cases through to the end,” wrote analysts on the Telegram channel Finek | Fintech & Banking. According to them, AGCM investigations typically begin following complaints from consumers and competitors, as well as on the regulator’s own initiative. In the case of Revolut, the trigger was likely a flood of user complaints in Italy, analysts at Finek | Fintech & Banking suggest.
Revolut strongly disagrees with the AGCM’s findings and will appeal the decision in Italian courts, a spokesperson for the bank told Oninvest. According to the spokesperson, the fintech bank operates in Italy in accordance with international anti-money laundering (AML) and counter-terrorism financing practices, as well as Italian banking standards. Under these standards, account verification is mandatory to protect the integrity of the financial system. “We remain confident in the clarity and transparency of our communications,” he said.
The Luminor Case in Lithuania
In yet another case involving the Baltic bank Luminor, the matter has already been settled. In 2022, Luminor unilaterally closed the account of a Lithuanian resident on “anti-money laundering” grounds, even though the customer had been maintaining the account in good standing since 2014. In November 2024, the Supreme Court of Lithuania ordered the bank to reinstate the account and pay the customer €3,673.7 in compensation for legal costs. This decision is final and cannot be appealed.
In its ruling, the court clarified that a bank has the right to unilaterally terminate a contract with a customer only on the grounds specified in the general agreement, or only for valid reasons. The statement that the account was closed as part of efforts to combat money laundering and terrorist financing was too formalistic and disproportionate to the risk that the customer might have posed to the bank.
“This ruling is more interesting,” says Anton Imennov, senior partner at the Pen & Paper law firm. The Supreme Court of Lithuania has confirmed that a bank cannot formally cite AML compliance obligations as grounds for terminating a bank account agreement. Termination of service is a last resort that can be applied only based on a specific risk posed by the client. The client must be provided with sufficient information to understand the reasons for the termination, adds Imennov.
The OTP Bank Case in Slovenia
According to Imennov, another telling story is the case of a customer of Slovenia’s OTP Bank who tried to pay for gas using his wife’s card. After a gas station attendant entered the man’s information into the payment system, the bank blocked the account linked to the card. The reason for this was that the customer was on the U.S. OFAC sanctions list. In the notice of account closure, the bank cited heightened AML risks associated with the customer. He filed a lawsuit in a Slovenian court and also asked the bank to allow him to open a basic account in accordance with EU Directive 2014/92/EU. Under this directive, any legal resident of the EU has the right to a basic payment account and a debit card linked to it.
The case was heard by various courts. On June 11, the EU court ruled that, despite U.S. sanctions, the client retains the right to open a basic account at a European bank. The court noted that EU law does not provide for an automatic ban on establishing business relationships with individuals subject to sanctions imposed by third countries.
"This decision shows that measures to combat financial crime must be evidence-based and proportionate," comments Bastian Schwind-Wagner, an expert on anti-money laundering.
Banks may still refuse to open an account if the assessed risk is unmanageable, but they must justify this decision based on more than just the customer’s inclusion on a third country’s sanctions list.
It follows from the ruling that the Court of Justice of the European Union essentially upheld the customer’s right to a basic account, but the outcome of the case depends on OTP Bank’s individual review. OTP Bank Oninvest declined to disclose the outcome of the case to Oninvest, citing data protection and the confidentiality of the client relationship.
How will these case studies help customers whose accounts have been frozen?
These court rulings may help EU residents who have had their funds frozen or their accounts closed unilaterally, but only to a limited extent. In Lithuania and Italy, it will be easier for customers to defend their position when dealing with a bank than in other countries. But even there, it is important to assess the significance of these rulings realistically: they are “not a magic bullet for all cases of overcompliance,” according to Imennov.
During the pre-trial settlement stage, it may be helpful to refer to relevant decisions by regulators and courts in other EU countries. For example, according to Paris-based attorney Yulia Koroleva, in France it makes sense to refer to such practices when communicating with a bank, the banking ombudsman, and the Defender of Rights (an independent constitutional body to which one can turn to protect one’s rights).
If the case goes to court, it will be difficult to cite court rulings, since French regulations are generally much more favorable to banks than Lithuanian ones, Koroleva explains.
In France, a bank has the right to close an account without explaining the reasons for its decision, since a bank account agreement is open-ended and may be terminated by either party at any time, provided that two months’ notice is given. Furthermore, if money laundering is suspected, the bank is even exempt from the obligation to notify the customer in advance of the account closure.
“Therefore, the Lithuanian ruling requiring that the grounds (for closing the account—Ed.) be disclosed to the customer cannot be directly applied: for a French judge, this is merely an example from foreign case law based on different legal standards,” she concludes.
In a French court, it makes sense to rely on local regulations—such as abuse of rights, failure to meet notification deadlines, and discrimination based on nationality—as well as on rules common to the entire EU, Koroleva explains. For example, the European Banking Authority’s 2022 conclusion on “derisking,” which explicitly condemns the closure of accounts for entire categories of customers without individual review.
Imennov and Koroleva believe that as similar complaints accumulate, regulators will increasingly require European banks to conduct individual risk assessments for clients within the EU. Faced with fines, banks will gradually adjust their customer communication scripts, providing more specific details about their decisions. “The successes of individuals in other jurisdictions may encourage clients to take a more proactive stance on having their accounts unfrozen,” Imennov hopes.
But overcompliance isn't going away. As long as losing a lawsuit over it costs banks less than the fines for violating sanctions laws, their behavior won't change, Koroleva believes.
By way of comparison: BNP Paribas paid a record fine of $8.9 billion in 2014 for violating sanctions. “I can assure you that all French banks remember this very well,” Koroleva adds.
This article was AI-translated and verified by a human editor
