Whether it was about banks, insurers or investment firms: consumers complained to BaFin much more often in 2023 than in 2022. Christian Bock, BaFin’s Director-General for Consumer Protection, explains why this is the case.

Mr Bock, German consumers have become much more vocal about their discontent: in 2023, BaFin received about 62% more complaints than in the year before. Calls to BaFin’s consumer helpline increased by more than 25%. What is the reason for this?

I consider it to be due to two things in particular: many more consumers know us by now. One reason is the fact that we are transparent about the measures we take. For example, I think of topics like securities account transfers and annual tax certificates – and the public statements we issued about them. These are important issues, particularly for consumers. But we have also imposed a number of high administrative fines and announced the appointment of special representatives. In addition, our activities on LinkedIn, Instagram and X have helped us to achieve the visibility we now have.

In other words, more consumers are now thinking, “If I want to complain about my bank, my insurance company or my investment firm, I can complain to BaFin”. What is more, our new complaint form, available on the BaFin website, makes it much simpler to contact us. This is helping us tear down communication barriers.

But it is also true that we witnessed a one-off effect.

You mean the disruptions in one particular bank’s retail service?

Yes, exactly. A significant share of the complaints about disruptions in the retail service at banks were attributable to one single financial institution.

Were there any interesting developments at other banks as well?

Yes, of course. A disproportionately high number of consumer complaints were about bank accounts being closed or frozen. The complaints frequently also concerned the delayed issue of annual tax certificates. The decision of Germany’s Federal Court of Justice regarding impermissible fees for building savings contracts was also an issue for many consumers.

The complaints about insurance companies are usually due to the fact that consumers think they are too slow. That was their most frequent complaint in 2022. How did things look in 2023?

Very similar: most of the complaints about insurance companies this past year were also about how consumers found them too slow. This was often in reference to the processing of claims for benefits and to payouts. The reasons were usually staff shortages, IT issues or an accumulation of loss events. In addition, property and casualty insurers were often difficult to reach by telephone. This prompted feelings of resentment in many consumers.

What about the other segments?

With regard to life insurers, policyholders were bothered in particular by the amount of the insurance benefits. Many complained that their level of participation in the valuation reserves had been too low or that they had not participated at all. Premium adjustments, trouble when switching to other policy conditions and the non-reimbursement of medical bills were the most common reasons for complaints about health insurers. The complaints about motor vehicle insurers and residential building insurers were usually about premium increases.

When it came to the investment service providers, the feedback was critical about their customer service in particular.

That’s right. Problems such as unsatisfactory letters of reply, long response times and poor reachability were brought to our attention remarkably often.

As for the reasons for complaints themselves, security and securities account transfers were again the most common issues in 2023. More than one third of the complaints addressed these issues – especially regarding overly slow transfers of investments held in securities accounts. According to our findings, staffing or IT issues were often the cause.

Why are there so many complaints in this regard?

Investors are becoming increasingly mobile and cost-conscious. Longstanding loyalty towards one single provider – the way we knew it in the past – is becoming less and less common. Many are primarily looking for a low-cost provider. Investors tend to change providers more often – and this increases the probability that problems will arise.

In the past, when people complained to BaFin about investment firms, it was often about investment advice. For several years now, the share of these complaints has been decreasing significantly. Has investment advice improved?

More than anything else, investment advice has steadily become less important. The share of complaints in this respect amounted to substantially more than 10% back in 2018. It has now stabilised at about 3%. In addition, the number of investment advisers has decreased significantly. For us this is a sign that investors are going to a branch less and less often to obtain advice. Increasingly popular are services without advice, such as those offered by neobrokers. We are responding to these trends by changing our supervisory focus – specifically, we are increasingly monitoring the new services being offered in securities trading. This is giving rise to other interesting questions, for example regarding customer mobility as mentioned before.

What does BaFin do with the many complaints it receives from consumers?

The individual complaints help us to obtain a good overview of the problems being faced by customers within the financial sector. But they also give us an overall view of changes in behaviour: the complaints have made the greater level of customer mobility crystal clear, for example – and we can respond accordingly.

If we have reason to believe that consumer protection requirements are being violated in a manner that affects a large number of consumers, we assess whether we can take action and what measures are possible. In addition to our own findings from the supervisory work that we do, complaints are an important indicator for these assessments.

BaFin is responsible for collective consumer protection. What does that mean?

“Collective” means that BaFin protects consumers as a whole in the financial market. BaFin is neither authorised nor able to issue legally binding decisions on disputes in individual cases. Those are matters best taken to the courts – and ombudspersons and dispute resolution entities are available to help as well.

Whom else can consumers turn to?

We recommend that consumers always first of all contact their bank, insurance company or investment provider whenever they have problems. That they contact them in writing, requesting a statement. If this does not help to resolve the issue, consumers are encouraged to contact us.