The legal situation is clear: for years, the German savings banks have paid too little interest from long-term premium savings contracts. The Federal Court of Justice (BGH) decided in three cases, for the first time in October. The judgments are groundbreaking. Because many of the 367 savings banks had premium savings contracts on offer.
Specifically, it is about the fact that, according to the BGH, the savings banks have incorrectly calculated the variable interest rates in the savings contracts, which results in additional payments. Not only that: the financial regulator Bafin also sees it that way and calls on the financial institutions to react.
And what do the savings banks do? Nothing. They rely on the ignorance of the customers. So far, only a fraction have sued individually or by means of a model declaratory action to receive additional payments.
From an economic point of view, the approach taken by the savings banks makes sense. It’s about a lot of money, because there are likely to be more than a million such savings contracts. On average, consumer centers calculated additional payments of 3,000 to 4,600 euros per saver.
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The waiting of the savings banks is probably also due to the fact that the BGH has referred the specific interest calculation back to the lower court. The Dresden Higher Regional Court is to use experts to determine what interest rate is appropriate.
It is quite possible that the report will ultimately result in lower back payments than consumer advocates have calculated. Or that the legal dispute then ends up before the BGH again.
Customary on the market does not mean correct
But the behavior of the savings banks is bold – as is part of their argument. Among other things, they explain that their calculation method with an absolute interest rate difference is customary in the market and easier to understand for consumers.
The former may be so – but only because many financial institutions calculate the interest incorrectly. This justification is becoming more and more difficult, the more test cases consumer advocates win. However, the second statement is condescending towards the customers.
In addition, it seems as if the savings banks are playing for time and thus that fewer and fewer customers can make any claims at all. The public financial institutions have already terminated well over 100,000 premium savings contracts. Premium savings contracts, many of which were concluded in the 1990s, are attractive to customers given the negative interest rates, but are becoming a loss-making business for the savings banks.
Claims for additional interest payments expire after three years. In addition, many of the savers affected are already old.
On top of that, the behavior of the savings banks is risky. Because it could be that the Bafin ultimately condemns the financial institutions to additional payments. And that would possibly be much more expensive for the savings banks than to make their own offers for additional payments at an early stage.
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