COREDO > Business support > Legal Protection for Business > Resolving Legal Disputes with Financial Institutions

Resolving Legal Disputes with Financial Institutions

Frozen funds, blocked accounts, and refusals to return money can create significant risks for businesses. In many cases, such actions by financial institutions can be challenged using the legal remedies available under applicable laws.

Since 2016, COREDO has been representing clients in disputes with banks, payment institutions, and electronic money institutions (EMIs), providing comprehensive legal support — from preparing claims and regulatory complaints to dealing with regulators and representing clients in court.

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When Disputes with Financial Institutions Arise

Conflicts between businesses and financial institutions in the EU develop along several typical patterns. Understanding the nature of the dispute enables the right resolution strategy to be chosen.

Account fund freeze.

A bank or payment institution suspends account operations as part of an AML check. The freeze often drags on without specific timeframes or explanations, even though regulators require financial institutions to observe established procedural deadlines.

Refusal to return funds.

The institution closes the account and offers to return only part of the balance, or delays the return citing compliance requirements. Under European law, such an approach is unlawful: the obligation to return client funds is not lifted under any circumstances other than a direct court order.

Unilateral contract termination.

An EMI or PI terminates services without ensuring a correct transition: funds are held, settlements suspended, and the company’s business obligations are put at risk.

Unfair commission charges.

The institution debits penalty or additional fees not provided for in the contract, or withholds funds against disputed claims.

Licence revocation and liquidation.

If a financial institution has lost its licence or is in the process of liquidation, clients risk not receiving their funds in full. In such cases COREDO represents the client’s interests within the liquidation procedure.

Who This Service Is For

Resolving disputes with financial institutions is a specialised legal service for companies operating in the financial sector or actively using EU financial infrastructure.

Fintech companies and startups. For technology companies providing financial services, access to bank accounts and payment infrastructure is an operational necessity. A fund freeze or account closure without explanation can bring a business to a halt within days.

EMIs and payment institutions. Licensed financial companies frequently become clients of larger correspondent banks, which unilaterally terminate correspondent relationships or freeze liquidity pools.

Crypto companies and CASPs. Companies working with crypto-assets face heightened scrutiny from banks. Service refusals and fund freezes are a common problem for crypto business operators even when a valid CASP licence under MiCA is in place.

Corporate clients. Any company holding significant funds in a European bank or payment institution may potentially encounter unlawful actions by a financial institution — particularly in cross-border transactions or changes in ownership structure.

Investors and funds. In the context of M&A transactions or investment operations, disputes arise regarding the transfer of escrow payments, return of deposits, or fulfilment of payment guarantees.

Cross-border disputes with non-EU financial institutions. COREDO also represents clients in disputes with banks, payment institutions, and financial regulators in non-EU jurisdictions. Such disputes often require coordination between EU and non-EU legal frameworks.

What the Dispute Resolution Service Includes

The COREDO legal team offers a full range of pre-litigation and litigation measures for resolving disputes with financial institutions.

Legal Analysis of the Situation

At the first stage, COREDO specialists study the available documents: the contract with the financial institution, correspondence, account restriction notices, and other relevant materials. A legal position is formed: which rules have been violated, which claims are well-founded, and what the prognosis is for each possible resolution scenario.

Pre-Litigation Claim Work

COREDO lawyers draft structured claim letters addressed to the financial institution, with references to applicable European and national legislation. A properly drafted claim, appealing to the institution’s specific regulatory obligations, often makes it possible to achieve resolution without proceeding to subsequent stages. The COREDO team’s legal expertise in EU financial regulation is a significant advantage at this stage.

Complaints to Supervisory Authorities

If the claim produces no result, the next step is to contact the relevant regulator: Česká národní banka (ČNB) for the Czech Republic, the Financial Conduct Authority (FCA) for the United Kingdom, Lietuvos Bankas for Lithuania, Finantsinspektsioon for Estonia, or another competent authority depending on the licensing jurisdiction of the financial institution.

Regulatory complaints follow a clear review procedure and create an official precedent. Financial institutions are generally highly motivated to resolve a dispute before the regulator initiates a formal review of their activities. In practice, this stage proves decisive in the majority of cases.

Alternative Dispute Resolution (ADR)

EU Directive 2013/11/EU provides for the mandatory application of alternative dispute resolution mechanisms for financial services. COREDO helps clients make use of ADR procedures, including through specialist financial ombudsmen operating in most EU jurisdictions. This route is generally faster and less costly than litigation.

Litigation

In cases where pre-litigation measures have produced no result, or where the situation requires urgent court intervention, COREDO represents the client’s interests in court. This includes filing claims, interim measures (freezing funds in the financial institution’s accounts), and enforcement of court judgments.

How We Work

Initial consultation and assessment.

The client describes the situation and provides available documents. A COREDO lawyer conducts an initial analysis and formulates a legal position: the validity of claims, applicable rules, and likely outcome.

01

Strategy selection.

The most appropriate path is determined jointly with the client — claim work, regulatory complaint, ADR, or court action. In most cases, it is recommended to start with pre-litigation tools, which produce results faster and at lower cost.

02

Document preparation.

COREDO lawyers draft claim letters, complaints, or litigation materials in accordance with the standards of applicable law and the requirements of the recipient. Where necessary, notarisation and document translation are arranged.

03

Negotiations and communication.

The COREDO team conducts correspondence with the financial institution and, where necessary, with the regulator. The client receives regular updates on the progress of the case and is promptly notified of each significant development.

04

Enforcement.

After an agreement is reached or a judgment is handed down, COREDO, where necessary, supports enforcement — including the actual recovery of funds and closure of the dispute.

05

Jurisdictions

COREDO protects clients’ interests in disputes with financial institutions licensed in the following jurisdictions:

EU and EEA:

Czech Republic
Estonia
Lithuania
Poland
Germany
Austria
Netherlands
Cyprus
Malta
United Kingdom
Other EU and EEA jurisdictions — on request

Non-EU Financial Centres:

Singapore (MAS-regulated banks and payment service providers)
United Kingdom (FCA-regulated institutions)
Switzerland (FINMA-regulated banks and financial institutions)
Canada (FINTRAC-regulated Money Services Businesses)
Dubai and UAE (VARA-licensed crypto platforms and related entities)

International arbitration mechanisms for disputes spanning multiple jurisdictions are also available.

Service Cost

The cost of resolving disputes with financial institutions is determined individually depending on the complexity of the case, the volume of work required, and the chosen resolution path. Pricing is based on the hourly billing model of COREDO lawyers. For more information about the cost of legal services and the hourly billing model, see the Legal Opinion page.

Our Experts

Disputes with financial institutions at COREDO are handled by specialists from the legal team with deep expertise in European financial law.

Pavel Kos

Head of Legal at COREDO. Since 2016, he has specialised in legal support for financial companies in the EU: licensing, M&A transactions, corporate matters, and protecting clients' rights before regulators.

Basang Ungunov

Lawyer at COREDO. Specialises in legal opinions, contract work, and client support in the field of financial services.

Frequently Asked Questions

A financial institution has frozen our account — where do we start?

The first step is to gather all available documentation: the contract with the institution, correspondence, and freeze notices. You should then consult a lawyer to assess the situation and determine a strategy. In most cases, a properly drafted claim specifying the rules that have been violated produces results at the very first stage.

Is it realistic to recover funds if an EMI has lost its licence?

Yes, although the process is more complex: client claims are considered within the liquidation procedure. Under European rules, client funds must be held separately from the financial institution’s own assets and are to be returned on a priority basis. Timely involvement of a lawyer in the liquidation procedure substantially increases the chances of full recovery.

How long does dispute resolution take?

Timeframes depend on the chosen path and the institution’s willingness to engage. Claim work takes from 2 to 6 weeks. A regulatory complaint is reviewed within 1 to 3 months depending on the jurisdiction. Court proceedings take 6 months or more. In practice, the majority of COREDO cases are resolved at the pre-litigation stage.

Is it possible to submit a claim and a regulatory complaint simultaneously?

Yes, these tools are not mutually exclusive and are often used in parallel to strengthen the position. A COREDO lawyer determines the optimal tactics taking into account the specific circumstances of the case.

Does COREDO only work with Czech institutions?

No. The COREDO team has been working with financial institutions across the EU and EEA since 2016. Where necessary, legal partners in specific jurisdictions are engaged to provide local expertise.

What if the institution does not respond to the claim and the regulatory complaint?

In that case, the next step is court action. COREDO supports the entire process: from preparing the statement of claim to representing the client’s interests in court and enforcing the judgment.

Submit Application

If your funds have been frozen or a financial institution is refusing to fulfil its obligations — contact COREDO. The Head of Legal will review the situation and propose the optimal strategy for protecting your interests.