December 29 will long be remembered by employees of the Association of German Banks (BdB). That was the day when yellow crates with 30,000 registered letters piled up at its mediation center – four times as much mail as is usually delivered in an entire year.
The reason for the flood of mail was a decision last fall by the Federal Court of Justice. The court found that banks had charged illegal fees – and decreed that customers could reclaim processing fees on credit agreements they had paid since 2004. But they had to hurry. For loans through 2011, the deadline for submitting claims was the last day of 2014.
The letters kept pouring in. Over 100,000 claims were submitted to the BdB alone in connection with processing fees for credit agreements.
The BdB has become the place to go for customers of such large financial institutions as Deutsche Bank, Commerzbank or Targobank, and Santander Consumer Bank, which is heavily involved in the credit business.
Between 2005 and 2013, banks charged customers an estimated €13 billion in illegal fees, according to the consumer association, Stiftung Warentest.
Other mediation centers report a similar onslaught. Some 9,000 customers met with an ombudsman for the Volks- und Raiffeisenbank chain of retail banks, as well as at the largest of the eight arbitration centers for Germany’s savings banks, die Sparkasse.
The associations emphasize that each claim letter doesn’t necessarily represent a single legal dispute. For example, many customers wrote to both their bank and the ombudsman.
“First and foremost, the customers want to avoid falling under the statute of limitations, so that they don’t lose the right to reimbursement,” said a BdB spokesperson.
But the financial institutions might have contributed to the uncertainty. Before Christmas, reports circulated that some banks were refusing to cooperate or were not responding to written demands in due time – so customers started to worry about the deadline.
In the meantime, many banks have started making the first payments.
“With classic consumer credits, the reimbursement of fees is proceeding with no problems,” said Markus Feck, from the Consumer Protection Agency of North Rhine-Westphalia.
Complications tend to arise more with real-estate loans. “The banks are arguing that the court’s verdict doesn’t apply in those cases,” said Mr. Feck. “The consumer protection agencies are of another opinion.”
So there could be a lot more genuine complaints in the case of home loans and building-savings contracts. The ombudsman of the private home savings and loan associations is processing 7,000 cases. The mediation center of the Association of German Public Banks, to which customers of state building and loan associations and business development banks can turn, has received 10,000 letters.
The actual costs could be quite substantial for banks. Sample refund claim letters, on the websites of consumer protection agencies, have been downloaded three million times. So far, banks have not said how many claims have been submitted or for how much.
According to the German Central Bank, between 2005 and 2013 Germans signed a total of 65 million loan contracts that could be affected by the court’s decision. During that period, banks charged customers an estimated €13 billion in illegal fees, according to the consumer association, Stiftung Warentest.
That doesn’t take into account interest that customers might be owed. Since a bank would have made money while it held illegal fees, it must add an extra 5 percent onto basic interest for the period. The higher the loan, the larger the claim.
Laura de la Motte is an editor on Handelsblatt’s finance desk and a specialist-banking correspondent. To contact her: firstname.lastname@example.org.