More legal clout required for Bafin: Consumer advice center criticizes gaps in consumer protection powers.

More legal clout required for Bafin: Consumer advice center criticizes gaps in consumer protection powers.

A new report commissioned by the Federal Association of Consumer Organizations (VZBV) shows that the powers of the Federal Financial Supervisory Authority (Bafin) should be defined more clearly in order to better protect consumers. The report, prepared by Professor Peter Rott, demands, among other things, that Bafin should be able to oblige providers to repay unlawful fees if consumer advice centers have won a judgment. An example cited in the report is a cease-and-desist order from Bafin against the charging of negative interest rates. A company lodged an objection and referred to a decision by the Federal Court of Justice (BGH). However, the VZBV expert argues that in this way companies could avoid supreme court decisions and legal enforcement by Bafin.

Another example concerns a general decree from Bafin on bonus contracts. Over 1,100 credit institutions objected to this, meaning the matter still has to be clarified before an administrative court. However, the consumer's claims could become statute-barred. The report suggests that Bafin's orders should have an effect that blocks the statute of limitations. Bafin itself argues that the administrative court's ruling is not yet legally binding and therefore no changes to the law are necessary.

Neither Bafin nor the Federal Ministry of Finance are currently planning any changes to the law regarding additional lawsuit and legal enforcement options or the Bafin Act (FinDAG). However, both sides agree that cooperation in collective consumer protection should be improved.

The VZBV report also calls for the Bafin's confidentiality obligation towards the Federal Association of Consumer Organizations to be lifted. However, Bafin argues that this is regulated by EU law.

The possible impact of these demands could mean that Bafin has more legal clout and providers can be held more accountable. A clearer definition of Bafin's powers could better protect consumers from unlawful fees and other violations. The statute of limitations for consumer claims could be prevented and consumers' rights could be strengthened. More intensive cooperation between Bafin and the Federal Association of Consumer Organizations could lead to more effective consumer protection.

However, according to a report by amp2.handelsblatt.com, there are currently no changes to the law in the works and it remains to be seen whether the demands of the report will be implemented. It remains to be seen whether further developments will occur on the market or in the consumer sector that could lead to legal changes or expansions of Bafin's powers.