Verification of the expense and interest statements of credit institutions
The account termination
Entrepreneur Joachim Müller (name changed), gets into economic distress when his bank terminates the business relationship by giving notice and makes all loans (about EUR 500,000) due. Müller does not give up. He gets a tip from his financial services provider: And lo and behold – surprisingly, a chartered accountant who is now involved comes to the conclusion that the forecast for the continued existence of his company is positive and that no insolvency is to be filed. Because an account check showed that the bank had charged the customer incorrectly over many years, resulting in a credit balance (!) of well over 1 million euros.
Can it be? Yes, more often than you might have thought! Corporate customers, industrial companies and real estate investors are particularly affected.
The clean slate
Competence and trustworthiness have always been regarded as the foundations of German banks and savings banks. Whether young professional, employee, entrepreneur or pensioner, almost every German citizen of full age has an account at the bank of his or her choice to deposit salaries, funds for entrepreneurial activities or reserves for a carefree retirement. After all, everyone knows that savings are only really safely stored when they are not under the mattress, but safely on the bench. The responsibility for the preservation and care of their own assets is willingly placed in their hands, because only the bank is trusted completely – but often also their possessions.
The countless banking scandals have had a massive impact on the confidence of entrepreneurs in their own bankers. Under 80% of all entrepreneurs distrust their own house bank. This is just one reason for the rosy outlook for independent financial service providers.
It is hard to imagine that banks and savings banks illegally make part of their profits at the expense of their own customers, but a long list of injured parties reveals this as a sad reality. Incorrect account management causes thousands of bank customers, some of whom suffer considerable losses. The procedure here is as simple as it is effective: Debits are debited early, credits are credited late, weekends and public holidays are used as working days and contractually agreed conditions are changed tacitly. Time and interest rates are becoming arbitrary in the hands of many banks and savings banks, whose lucrative secondary income increases with the immense number of customers served in this way.
Control through special software
For a long time, banks and savings banks thought their methods provided a safe haven. Particularly during years of strong economic activity, there was hardly any reason for owners of mobile business accounts to check all booking details exhaustively. But times have changed. In view of the tense economic situation, the threat of insolvency may come as less of a surprise to some entrepreneurs than the fact that they have been additionally weakened by an unexpected factor – namely their own house bank. Only regular monitoring of settlement procedures can protect against possible overreaching by banks and savings banks.
Because of the compound interest effect, as the above example shows, the entrepreneur often has to deal with enormous amounts of money that are missing. In the meantime, word has spread among insolvency and bank lawyers that the checking of bank statements can regularly reveal not inconsiderable “calculation errors”.
The usual accounting software does not offer the possibility of continuous monitoring of interest, expenses, outlays and value dates for interest settlements: in the course of its work in the field of account auditing, which has been ongoing since 1988, Sachverständigenbüro Eibl has succeeded in developing efficient instruments against unlawful banking practices and in applying them successfully. By means of the computer-aided audit system EIBL, even the most complex accounting procedures can be completely disentangled. Based on complete account statements, incorrect calculations are detected and corrected in accordance with current legal requirements. The result is usually a capital shortfall, which, as a result of the clearly structured calculation list, achieves a level of transparency that is noted with unease by many financial institutions.
Your money isn’t gone – it’s just somebody else
The effective verification and evidence of a recalculation of accounts serves to secure the well-earned property. In the media (e.g. Plusminus, DMEuro, Impulse) and among experts (e.g. DeutscherAnwaltverein, Arbeitsgemeinschaft Bank- und Kapitalmarktrecht, INDat), word has long since got around that a healthy distrust of the content of credit and account statements can pay off. If this instrument is used successfully by bankruptcy administrators, it is even more worthwhile to do some calculations before a crisis.
Get the money back together with your customers
Who do you think invested the “recovered” million euros? And to whom he told his story at the regulars’ table?
Vaccination for banks
Do not be blinded by the bankers’ appearance: Many of them have only just mastered the four basic arithmetic operations and hardly worry about whether their own IT systems are calculating correctly. The Effektenspiegel wrote in its issue of 27.02.03: “Germany and partly Switzerland (…) have the most incompetent bankers in the world, all of them lawyers by the way, who lack any feeling for economic connections.
by Dr. Johannes Fiala and Hans-Peter Eibl
with friendly permission of www.experten.de
published on 25.04.2005
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About the author
Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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