Germany’s BaFin registers rise in consumer complaints about securities-related matters in 2018

Germany’s Federal Financial Supervisory Authority (BaFin) has earlier today published statistics about consumer complaints it received in 2018. The regulator saw the steepest rise in the number of complaints handled in the securities segment.

BaFin processed a total of 676 consumer complaints related to securities matters. This is up from 522 such complaints in 2017. The number of enquiries about this segment was 396, up from 272 in 2017. The regulator attributed the increase to the reform of the Investment Tax Act as well as the initial difficulties and uncertainties stemming from the MiFID II Financial Markets Directive. In the first few months, for example, investors complained about limited trading opportunities.

Submissions to lending and financial services institutions amounted to 5,791 in 2018, nearly unchanged from 2017 levels of 5,587.

The German regulator has been warning the public about investment scams. In December last year, Germany’s Bundeskriminalamt (Federal Criminal Police Office), along with BaFin addressed the public voicing their concerns about the activities of scammers that lure their victims via the offer of “simple and safe” trading in binary options and CFDs on cryptos. The fraudulent entities most often are unauthorized to conduct any financial services business in Germany, the Police warned.

The watchdog has also acted to bolster investor protection. It is about to implement restrictions on the offering of CFDs to retail clients on a permanent basis at a national level. The relevant product intervention measures were introduced by ESMA but have temporary nature. BaFin’s plan is to make these measures permanent. The list of restrictions includes maximum permissible leverage, a negative balance protection, a margin close out rule, a restriction on the incentives offered to trade CFDs and standardised clear risk warnings.