Wrong interest calculation with system: Interest fraud by banks

Interest fraud with system

How banks and credit institutions earn money with incorrect interest calculations

We Germans are known beyond our national borders for our preference for cash and savings books. In a European comparison, we are the undisputed number one with a savings rate of approx. 17 %. Our confidence in saving seems to be unshakable and despite banking crises and persistently low interest rates, we are sticking to the goodold savings book. Even our basic trust in banks and savings banks seems to be irrefutable, because, as the German federal government already said during the financial crisis of 2008, “savings deposits are safe”. That seems to reassure us to this day. However, the question we should have asked ourselves today and even then is a different one. Are we and our hard-won savings safe from the banks and their products?

The answer to this question can be answered with a clearno, because most of us are simply not sufficiently familiar with the subject matter and depend on the statements of the bank advisor or insurance agent. Once we have decided on a product, we rarely question it and our decision. More devastating, however, is the fact that most of us do not check whether the bank’s statements and interest promises are correct. This makes us as investors easy victims for the financial world, who lure us into the interest trap with increasingly complicated products and settlement models. The digitalisation of banking processes and the automation of interest settlements and account management additionally lull us into a supposed security. The widespread opinion is that machines do not make mistakes.

Which savings products are affected by systematic interest fraud

The basic principle here is no special products are in the focus of the banks. For example, incorrect settlements and fraudulent interest calculations were found for different savings models, loans and insurance. Nor can systematic fraud be reduced to specific banks or savings banks. It is worth recalculating, because according to the current state of affairs well over 30 products are known to be affected by banks, and with long maturities the damage can quickly amount to several thousand euros.

According to the current status, the following products, among others, are affected:

  • Variable interest rate savings contracts
  • Premium savings contracts
  • Overdraft facilities (overdraft credit)
  • loans and credits => especially with variable interest rate
  • Riester bank savings plans

Interest fraud on loans and credits

It is quite obvious that the method of getting the savers and money investors to pay their interest and their money has become common practice in the financial industry. But non-savers can also be affected by interest rate fraud. Several cases of interest fraud in the area of real estate loans and commercial loans are known. These can, especially in the case of long-term maturities, cause related damage to those affected. The mesh is also very simple here. The credit institution simply charges the loan or borrower the wrong interest rate, without passing on market fluctuations to the customer when interest rates fall. The credit institution would, however, be obliged to adjust thebasic structure of the interest rate in line with the market.

In simple terms, this means that borrowers pay too much interest on their loan at the end of the day because the lender maintains the agreed interest rate despite market fluctuations. It is extremely difficult to detect the fraud without the correct knowledge of financial mathematics, the vertigo, because even classic financial accounting systems are not designed to detect this crime.

Another trick of the banking houses is to work with different interest rates. Here, the correct, expected interest rates are shown correctly on the respective account statements, but the bank calculates the interest with completely different values. Here, too, it is worthwhile to recalculate acribically and, in the event of the slightest appearance of irregularities, to seek the assistance of financial experts and legal support. Our experienced team will provide you with comprehensive support in claiming your right.

How do you find out whether you are affected by interest fraud

If you suspect that you too are affected by the interest fraud, there are various ways of tracking down the systematic fraud. Since it can be difficult to understand the complex constructs of interest calculations and to make a valid calculation yourself, we recommend that you first research whether it is already known that irregularities have occurred in your saving product . You can do this, for example, by sending a request to your local consumer advice centre. It is known, for example, that many investment and savings products from the years 1990 to 2000 are affected by incorrect interest calculations, especially if the contracts were concluded with variable interest rates. You will also find a good indication that you are affected by interest fraud in your contracts. These savings products often have interest escalation clauses, interest rate change clauses or interest rate adjustment clauses, all of which are (confirmed by a federal court) illegal and disadvantage the investor.

How we help you to track down the systematic interest fraud

If the suspicion of an present interest fraud should be confirmed after your own research, you should get to the bottom of the matter founded and expertly. The systematics of fraud is not always immediately obvious and a interest mathematical as well as legal verification is required. You are welcome to contact us in confidence even in the case of a suspicion of a suspicion of an initial suspicion and we will check your case by means of a so-called ForeCheck or a test check. If the suspicion is confirmed, we recommend a exact account check as well as a detailed examination of your contracts. It is important for you to know here that, due to the principle of recognising the balance, as a customer, you are under the responsibility of providing proofand that you must prove to the bank that it has not calculated the interest correctly. In addition to checking the contracts, this also requires a substantial analysis of all account statements and vouchers. Of course, we offer you all services comprehensively from a single sourceand can provide you with a non-binding estimate of the reimbursement claims to be expected already after the preliminary examination .

Our services in the area of interest fraud and account auditing

We offer you comprehensive solutions and advice on all aspects of banking law, contract reversal and account verification . We support our clients in the detection of incorrect calculations of interest rates and/or contracts that are not compliant with the law. For our clients, we also work across systems and on an interdisciplinary basis. Take with us now without obligation contact on.

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About the author

Dr. Johannes Fiala Dr. Johannes Fiala

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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