N26 forced to limit its account openings to reduce fraud | iGeneration

25/12/2022 By gifsauce 622 Views

For some time now, it has no longer been possible to open an N26 account directly: we are redirected to a waiting list without further information on the processing times. For what ? The neobank is currently limiting registrations following a sanction from BaFin, the German financial regulator. He felt that the company was not doing its utmost to prevent fraud.

This suspension of openings was announced by the neobank in a press release:

This is a blow for the establishment, which posted an average monthly rate of 166,000 new accounts in 2020. The neobank is accused of harboring numerous fraudsters and the process of identifying new customers is notably in question. This lax entry is felt for other banks.

N26 forced to limit account openings to reduce fraud | iGeneration

“The fraudsters are mostly at N26! declared Jürgen Gros, the president of a group of Bavarian banking establishments at BaFin. He estimates that the fraud towards N26 amounts to €130,000 just for the Volksbanks and Raiffeisenbanks brand, which is not the largest financial group across the Rhine.

N26 is aware of the problem: its user identification process considered too lax cost it a fine of 4.25 million euros last month. He is also accused of having been slow to report suspicious transactions in a money laundering case.

With this temporary limitation, the establishment will be able to review its customer verification system and comply with the requests of the regulator. No date for a return to normal has yet been mentioned, but N26 has confirmed that this story should be settled in “a limited time”. This decision should not impact current users of the neobank.

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