© Reuters. Niels Nauhauser, monetary knowledgeable on the client recommendation centre in Baden-Wuerttemberg, poses on the Verbraucherzentrale constructing in Stuttgart, Germany, March 29, 2023. REUTERS/Lukas Barth
By Tom Sims and Marta Orosz
FRANKFURT (Reuters) – Complaints from customers about banks and different monetary companies in Germany rose by a fifth final yr, official knowledge exhibits, as regulators flex their muscle mass to shore up belief within the sector.
BaFin, Germany’s monetary watchdog, has been rising its concentrate on client safety within the wake of the collapse of Wirecard, the blue-chip cost firm that folded in an accounting scandal.
It obtained 15,000 complaints from customers in Europe’s largest financial system about their banks and different monetary service suppliers final yr, up from 12,500 in 2021 and a fourth consecutive yr of sharp will increase.
Gripes embody lengthy processing instances for account closures, adjustments to phrases and circumstances, and shrinking department networks, based on officers, bankers and client safety advocates.
The figures, reported by Reuters for the primary time, can be made public in an annual report in Might.
“It can’t be that monetary establishments are doing effectively as a result of they deal with their prospects badly,” Chan-Jae Yoo, a BaFin official, stated in an interview.
Deutsche Kreditwirtschaft, an umbrella organisation that lobbies for German finance, stated German banks are “extraordinarily steady and strong” and confidence stays “excessive” and “unaffected” by current turmoil stemming from the collapse of lenders in the USA and Switzerland.
However a survey final yr by YouGov confirmed that diploma of belief in Germany’s monetary sector, important for selling wider monetary stability and attracting capital to help financial progress, was under the worldwide common, lagging the likes of Canada, Australia and main Asian markets.
Niels Nauhauser, a client advocate within the southwestern state of Baden-Wuerttemberg, has spent twenty years preventing for client rights.
“The mere reality that customers are more and more asking us and searching for our recommendation is proof sufficient that they don’t totally belief monetary establishments,” he stated.
A research this yr by EY discovered 25% of these surveyed in Germany belief monetary companies, 31% do not and 44% had been on the fence.
GRAPHIC: Belief in finance, https://www.reuters.com/graphics/GLOBAL-BANKS/jnpwyjojmpw/chart.png
“As in any trade that gives providers in bulk enterprise, there are instances by which there are variations of opinion between the client and the financial institution,” Deutsche Kreditwirtschaft stated, pointing to its personal figures which confirmed a drop in client complaints final yr, in distinction to BaFin’s knowledge.
Protections and rights for patrons of monetary establishments have come beneath elevated scrutiny from regulators and the German courts.
BaFin, which has been overhauled with new management after being broadly blamed for not recognizing the fraud at Wirecard, final yr cracked down on the size of time granted to brokerages to course of account switch requests.
The weeks-long course of to shift an account to a brand new dealer would usually go away the client in limbo and on the mercy of any swings within the markets.
A key ruling by Germany’s excessive courtroom in 2021 additionally made it tougher for banks to alter their phrases and circumstances, overturning a apply that had for many years allowed banks to boost charges with out the express consent of account holders.
Bankers say the ruling has added to prices and paperwork.
In Stuttgart, extra well-known for its automobile trade than finance, Nauhauser has this yr received concessions from divisions of Deutsche Financial institution (ETR:) and Commerzbank (ETR:).
His subsequent goal is Allianz (ETR:), having sued the insurer over adjustments to life insurance coverage coverage payouts that he says aren’t clear. A listening to is scheduled in a Stuttgart courtroom this month. Allianz stated it “stands by all contractual commitments and ensures”.
In the meantime, Nauhauser promised to maintain the strain on monetary companies, massive and small.
“We would like providers to determine themselves within the market that meet client wants, not feed the monetary trade,” he stated.