• Germany's news in English

Consumer watchdog shows overdraft rip off

The Local · 16 Oct 2012, 11:20

Published: 16 Oct 2012 11:20 GMT+02:00

"Banks charge their customers up to 15.32 percent interest when they overdraw their cheque accounts, and that's despite the fact that they can borrow money for 0.75 percent themselves," consumer watchdog Stiftung Warentest said.

"Customers often do not find out how high their bank's interest rate is."

The group's comparison of 1,566 banks will be published in the magazine's November edition. Just over 350 of the financial institutions surveyed provided information on their rates voluntarily. Stiftung Warentest said its testers had to resort to "investigative methods" in some cases for nearly 600 other institutions.

The group was unable to secure any information on overdraft terms and conditions for about a third of the banks - which gave a range of reasons for staying mum.

One of them, Volksbank Senden, complained that Stiftung Warentest "did not treat banks well," the consumer group said. Others pointed the finger at their competitors, claiming they would not answer truthfully, while many simply said they did not wish to take part in the survey.

On average, banks charge 11.76 percent interest on overdrafts which - although lower than the previous year's average - Stiftung Warentest said was still too high, since the rates banks pay to borrow money has seen sharper decreases than overdraft rates.

Some banks stood out as particularly troublesome for people who have trouble balancing their cheque books. The Raiffeisenbank Fischenich-Kendenich in the state of North Rhine-Westphalia, for example, charges all customers 14.25 percent interest for overdrawing their accounts.

But there were bright spots in the list: More than 62 of the banks surveyed charged less than 9 percent in overdraft interest.

Story continues below…

The Local/arp

The Local (news@thelocal.de)

Your comments about this article

13:49 October 16, 2012 by whiteriver
These interest rate in overdraft shouldn't be compared with the bank's borrowing interest. The former is related to how risky is to lend money to someone without an approval. The second is a low risk investment.
14:22 October 16, 2012 by zeddriver
Lets see. If you want to open an account and ask what the overdraft rate is. And are rebuffed by them. Time to move on to another bank. If you insist on still opening an account with the bank that does not provide information then create an overdraft. Then shame on you for not only being daft but a poor manager of your own money.
Today's headlines
Pegida take to Dresden streets - to march against Pegida
Pegida demonstrators. Photo: DPA

Followers of the xenophobic Pegida movement marched in two factions on Monday evening in the capital of Saxony, brandishing fierce accusations of treason against one another.

Is it fair to call the AfD far right?
AfD leaders, from left, Georg Pazderski, Frauke Petry and Jörg Meuthen. Photo: DPA.

The AfD has been dubbed "far-right" over the past year as it has taken on a tougher stance against immigration and made gains in state elections. But at what point does one call a group far-right?

Dresden police guard Islamic buildings after mosque attack
The Dresden mosque that was hit by a homemade bomb attack on Monday. Photo: DPA.

All Islamic buildings in the capital of Saxony have been put under police protection on Tuesday after explosive devices were detonated at a mosque and a congress centre in the city.

Germany blocks WhatsApp data transfers to Facebook
Photo: DPA

German data protection authorities on Tuesday said they had blocked Facebook from collecting subscriber data from its subsidiary WhatsApp, citing privacy concerns.

Stuttgart fest pulls in twice as many boozers as Oktoberfest
Is this Oktoberfest or is this Stuttgart's Cannstatter Volksfest? Can you tell the difference? Well, it's Stuttgart. Photo: DPA.

Apparently Munich is no longer the top place to wear lederhosen and down beer one litre at a time.

The Local List
10 German films you have to watch before you die
Photo: DPA

These films are so good, not even The Cabinet of Dr. Caligari made the list.

Young man destroys 17 cars after visiting Oktoberfest

Early on Monday morning a drunk 29-year-old trashed 17 cars after staggering out of Oktoberfest into the Munich streets. It was one of several eye-popping crimes from "Wiesn" over the past few days.

VW emissions scandal
Audi tech chief leaves after reports link him to 'dieselgate'
Audi's head of technical development Stefan Knirsch stepped down on Monday. Photo: DPA.

Audi's head of technical development stepped down "with immediate effect" on Monday, the luxury carmaker announced, after German media accused him of involvement in parent company Volkswagen's "dieselgate" scandal.

Deutsche Bank shares hit lowest level in quarter century
Photo: DPA.

Shares in Deutsche Bank, Germany's biggest lender, sank to a historic low on Monday after reports at the weekend that Berlin had refused state aid for the embattled lender.

The Local List
The 10 worst German cities for students to find digs
Photo: DPA

It's the start of autumn, which means the start of the university year. But along with the excitement comes the stress of finding housing - and in some glamorous locations this can be a nightmare.

Sponsored Article
The Inner Circle: the secret to dating in Berlin
15 pics that prove Germany is absolutely enchanting in autumn
Sponsored Article
Why Jordan is the ‘Different’ East
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Sponsored Article
Retiring abroad: ensuring your health is covered
Seven great reasons to stay in Germany this September
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Sponsored Article
The Inner Circle: the secret to dating in Berlin
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
Germany's 17 Olympic gold medals in pictures
14 facts you never knew about the Brandenburg Gate
Ten times Germans proved they really, really love beer
Six things you need to know when moving to Germany
These 10 little-known German towns are a must see
German scientists prove birds can sleep while flying
London v. Berlin: Which is better for startups?
13 mortifying mistakes German learners always make
Enter if you dare: Berlin's best abandoned haunts
10 rookie errors all Brits make when they arrive in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd