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Bafin recommends legal resistance to premium savers

E.in the round table should finally have brought a solution to the long smoldering dispute over lucrative premium savings contracts. But the representatives from the banking industry and consumer protection organizations invited at the end of November could not reach an agreement, as the Federal Financial Supervisory Authority (Bafin) announced on Wednesday.

The Bafin is now reacting by calling on savers to carefully review their premium savings contracts. In addition, the financial supervisory authority is now also examining options under administrative law in order to create more transparency for bank customers. The Bafin announcement makes it clear that the financial supervisors are apparently very dissatisfied with the behavior of banks and savings banks in the premium dispute.

The Bafin advises consumers that many older savings contracts contain interest rate adjustment clauses which, according to the case law of the Federal Court of Justice (BGH) from 2004, are ineffective. Savings contracts from 2004 or from earlier years are affected. Elisabeth Roegele, Vice President of Bafin, said: “It is important that the savers concerned now actively approach their institutions themselves and have them explained which clause their contract contains in concrete terms.” The next step must then be to check whether it is legally compliant be.

Lucrative old contracts

The cause of the conflict, which has been simmering for years, is the low market interest rates. The low interest rates mean that the high premium payments to savers with particularly long-term contracts are becoming an ever greater burden for the banks. The credit institutions are pulling out all the stops to get rid of these burdens. You try to persuade savers to terminate lucrative old contracts or terminate them yourself. This has led to a number of legal disputes over the past few years.

Typical premium savings contracts work like this: savers pay in constant monthly amounts over the long term, with the total money invested receiving variable interest – i.e. at the reference interest rate applicable at the end of the year. In addition to the interest, however, the bank pays annual premiums, the amount of which increases with the duration of the contract. Therefore, premium savings contracts sometimes generate income well above the market rate – which is particularly noticeable in times of low interest rates.

As early as February, Bafin asked the banks to approach their long-term customers and offer them a solution. The highest court rulings have declared banks’ unilateral interest rate adjustment clauses to be ineffective, but overall there is uncertainty as to how this rulings should be implemented. According to Bafin, there are currently further model declaratory actions on premium savings contracts.

The authority now recommends bank customers to contact a consumer advice center or a lawyer to assert claims under civil law against their bank or to interrupt possible limitation periods.

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