Three ING customers went to the Board asking whether they had been discriminated against by their bank. In two cases, the Board ruled that discrimination had occurred; the third case is still pending. The Board also rules that the bank handled the discrimination complaint negligently.
Dutch financial institutions have a so-called "gatekeeper function. This means they must check for possible violations of several laws, including the Money Laundering and Terrorist Financing (Prevention) Act and the Sanctions Act. Both laws require banks to pre-screen (potential) customers and monitor payment transactions. According to the Sanctions Act, people on a European sanctions list are not allowed to open an account, obtain financial products (such as a mortgage) or receive money through a Dutch bank. In order to keep people on the sanctions list out of Dutch payment traffic, algorithms are used that, for example, search for suspicious characteristics, such as certain place names or names of individuals themselves. These two judgments were requested by people who were disadvantaged as a result of sanctions law checks.
In the first case, a man transfers a sum of €100 from another private bank account to his bank account at ING. In the description, he mentions his brother's Arabic-sounding last name. ING blocks the transaction and asks the man to send his brother's full name, address and date of birth. The man wants to know why the bank needs this information and contacts ING by phone. ING does not want to respond substantively to his question. Some time later the man again transferred an amount to his ING bank account. Again ING blocks and checks this payment, again asking for his brother's data. Asking again for an explanation but not receiving it, the man finally sends the requested information about his brother to the bank.
In the second case, ING blocked several transactions by a woman whose husband has a non-Dutch-sounding last name. With each blocking, the woman receives a request from ING for the full name, address and date of birth of her husband, whose name appeared in the descriptions accompanying the transactions. The woman provides the information and files a complaint about this transaction screening. She receives no substantive response to this complaint.
Both customers feel discriminated against and claim that mentioning the non-Dutch-sounding names in the description of the transaction can be the only reason for the blocking and monitoring.
Discrimination or discrimination can be either direct or indirect. Direct racial discrimination involves treating someone differently from others in similar situations because of their origin. In indirect discrimination, a course of action or policy appears neutral, yet affects people of a particular ethnicity in particular.
The Board finds that ING blocked and monitored both customers' transactions because of a partial match of their relative's name with names on European sanctions lists. The vast majority of sanctions lists include individuals with non-Dutch sounding names. By screening for similarities with names on the sanctions list, individuals with non-Dutch-sounding names are more likely to surface. So although ING does not directly select for non-Dutch-sounding names when blocking and checking, persons with non-Dutch-sounding names are blocked and checked more often by this method. Indirectly, ING thus discriminates on the basis of non-Dutch origin.
Direct discrimination is prohibited in almost every case. Indirect discrimination is not prohibited in some cases if there is an objective justification. This justification depends on the goal ING is pursuing with the distinction and the means it is using to do so.
The Board finds that the purpose of transaction screening is legitimate, namely to prevent people on the sanctions list from using Dutch financial services.
The Board then assesses whether the method of transaction screening is appropriate to achieve the goal, and whether it is necessary, in the sense that there is no less intrusive means at hand. The Board also assesses whether the screening is not disproportionately disadvantageous to one particular group. The means used by ING is to search for parts of a name that appears on the sanctions list, taking into account typing errors, for example. So the name does not have to fully or correctly match someone on the sanctions list. An algorithm scans transactions for possible suspicious characteristics. A bank teller must then assess potentially suspicious transactions and determine whether a transaction will be blocked and the customer asked questions.
In its policy, ING has stated that it only asks its customers once for an explanation and additional information from the same person. However, the second case shows that this does not always go well. Therefore, in the case of the woman in the second case, ING acknowledges that it wrongly asked for the same information from the woman multiple times.
ING argues that it cannot achieve the goal by a lighter means. The bank does need to screen extensively because it will be severely penalized by regulators if it mistakenly lets one payment through. Investigating every potentially suspicious transaction separately and only asking customers about additional risks would be unworkable, according to ING, because of the large volume of transactions to be monitored.
ING also believes its practices are proportionate. While the blocking and checks harm the interests of its customers, it serves an important social interest. The two customers believe that the large number of unjustified blockages not only cause personal harm, but also affect society as a whole.
The Board finds that transaction screening disproportionately harms the interests of persons of non-Dutch descent and constitutes indirect discrimination. The consequences of transaction screening are great, both for the individual customer and for society. ING has been unable to convince the Board that it takes the interests of unjustly affected customers sufficiently seriously. ING's method of communication to its customers, in which no personal explanation or explanation was given, plays an important role in this and has increased the negative impact.
Read the judgments:
Case 1: judgment 2024-63
Case 2: judgment 2024-62
Finally, the Board finds that ING handled the woman's complaint negligently. She never received a substantive response to her complaint and only a short confirmation of receipt. Both during the blocking and verification of the transactions and in the handling of the complaint afterwards, it was not possible for the woman to receive a substantive explanation or clarification of the reason and background. The Board holds this against ING. At the very least, ING should have provided a clear and comprehensible explanation for the extra checks, and be mindful of the possible discriminatory effect of these checks. ING has since apologized and acknowledged that communication throughout the transaction screening process should be more careful.
One in eleven Dutch people (9%) suspect they have experienced discrimination by financial institutions in the past two years. Among people with a non-western migration background, this is more than three times as high at 32%. Awareness of risks of discrimination at banks seems to be increasing, but structural and targeted measures to prevent discrimination are lacking. Banking exclusion is a serious and extensive problem, but too little is still being done about it. Where exactly is the problem, and what needs to be done to effectively reduce risks of discrimination and other human rights violations? Find out in this in-depth article: Discrimination by financial institutions
