Crucial Issues with Legal Protection of Consumers Human Rights when Banks unilaterally Close Accounts

Abstract

When unilaterally closing a customer’s account due to so-called de-risking, the customer’s interests are not only ignored by the bank but their human rights, including respect for his private life and presumption of innocence, are also severely violated De facto, de-risking stigmatizes discarded consumers as being involved in criminal activity without a court conviction. As a result of the unfair account closure, both the consumer's social and psychological integrity can suffer. Their rights to establish and develop relationships with other human beings and the outside world and respect for reputation are put in jeopardy. In order to overcome the above collision of interests, this study proposes a doctrinal assessment of consumer's interests that should limit the bank's right to unilaterally terminate the contract by the systemic and teleological interpretation of regulating rules in combination with the general civil principle of good faith. By analogy with the original source of the problem, this tool has been called the “Good Faith-Based Approach". Therefore, in view of states' affirmative obligations under the European Convention on Human Rights, this research shows that the consumers' conflicting interests should take priority in legal protection until the consumer's involvement in money laundering and terrorist financing is established and proven. A certain level of restrictions imposed on the consumers' fundamental rights could be considered justifiable to prevent money laundering as long as the business relationship with the bank continues. However, when rupturing contractual relations within the de-risking paradigm, only close adherence to the good faith principles can guarantee that the bank's rights are not applied by the bank formally and unreasonably, that is, against the sense, meaning, and goals established by the regulating authorities or contrary to the general idea of law. Keywords: Good faith, De-risking, Bank account closure, Unilateral termination of contract, Human rights