Complaints from consumers about banks and other financial firms in Germany rose by a fifth last year, official data shows, as regulators flex their muscles to shore up trust in the sector.
BaFin, Germany's financial watchdog, has been increasing its focus on consumer protection in the wake of the collapse of Wirecard, the blue-chip payment company that folded in an accounting scandal.
It received 15,000 complaints from consumers in Europe's largest economy about their banks and other financial service providers last year, up from 12,500 in 2021 and a fourth consecutive year of sharp increases.
Gripes include long processing times for account closures, changes to terms and conditions, and shrinking branch networks, according to officials, bankers and consumer protection advocates.
The figures, reported by Reuters for the first time, will be made public in an annual report in May.
"It cannot be that financial institutions are doing well because they treat their customers badly," Chan-Jae Yoo, a BaFin official, said in an interview.
Deutsche Kreditwirtschaft, an umbrella organisation that lobbies for German finance, said German banks are "extremely stable and robust" and confidence remains "high" and "unaffected" by recent turmoil stemming from the collapse of lenders in the United States and Switzerland.
But a survey last year by YouGov showed that degree of trust in Germany's financial sector, essential for promoting wider financial stability and attracting capital to support economic growth, was below the global average, lagging the likes of Canada, Australia and major Asian markets.
Niels Nauhauser, a consumer advocate in the southwestern state of Baden-Wuerttemberg, has spent two decades fighting for consumer rights.
"The mere fact that consumers are increasingly asking us and seeking our advice is proof enough that they do not fully trust financial institutions," he said.
A study this year by EY found 25% of those surveyed in Germany trust financial firms, 31% don't and 44% were on the fence.
"As in any industry that offers services in bulk business, there are cases in which there are differences of opinion between the customer and the bank," Deutsche Kreditwirtschaft said, pointing to its own figures which showed a drop in consumer complaints last year, in contrast to BaFin's data.
Protections and rights for customers of financial institutions have come under increased scrutiny from regulators and the German courts.
BaFin, which has been overhauled with new leadership after being widely blamed for not spotting the fraud at Wirecard, last year cracked down on the length of time granted to brokerages to process account transfer requests.
The weeks-long process to shift an account to a new broker would often leave the customer in limbo and at the mercy of any swings in the markets.
A key ruling by Germany's high court in 2021 also made it harder for banks to change their terms and conditions, overturning a practice that had for decades allowed banks to raise fees without the explicit consent of account holders.
Bankers say the ruling has added to costs and bureaucracy.
In Stuttgart, more famous for its car industry than finance, Nauhauser has this year won concessions from divisions of Deutsche Bank and Commerzbank.
His next target is Allianz, having sued the insurer over changes to life insurance policy payouts that he says are not transparent. A hearing is scheduled in a Stuttgart court this month. Allianz said it "stands by all contractual commitments and guarantees".
Meanwhile, Nauhauser promised to keep the pressure on financial firms, big and small.
"We want services to establish themselves in the marketplace that meet consumer needs, not feed the financial industry," he said.
(Editing by John O'Donnell and Kirsten Donovan)