Photo: (Volker Weihbold)
As reported, the Ministry of Social Affairs has commissioned the Association for Consumer Information (VKI) with a class action lawsuit against the banking sector. Banking experts are critical of the lawsuit’s chances of success. SPÖ and FPÖ are demanding legal intervention, a lawsuit takes too long.
For banking experts Stephen Pichler from the Vienna University of Economics and Business, the central question is whether the banks are making something like excess profits here. In other words, profits that are extremely high in the historical framework compared to the long-term average. “The answer to this question is clearly no,” said Pichler on Wednesday in a contribution to the Ö1-Mittagsjournal. The most recent interest surpluses would be in the long-term average. The banking expert also thinks little of the comparison of credit and debit interest on the current account. Those are apples and pears. From the banks’ point of view, overdrafts are the riskiest credit product with the highest default rate and therefore have high interest rates, according to Pichler.
penalties possible
Also Franz Rudorfer, Managing Director of the Federal Bank and Insurance Division of the Chamber of Commerce, points out in the Ö1 article that a current account is a payment instrument and not an investment instrument. Rudorfer did not comment on the lawsuit itself. It is not yet available to him, so he cannot comment on its content.
According to Wifo banking expert Thomas Url the lawsuit could be successful if it could be proven that the banks take advantage of the fact that customers leave credit in their checking accounts, be it out of convenience or because they are afraid to invest. The banks could then face penalties. However, Url does not think that it is possible to dictate the fee models to the banks.
criticism of smoke
The opposition parties SPÖ and FPÖ, in turn, criticize consumer protection minister Johannes Rauch (Greens). The minister should intervene by law, a lawsuit lasts months. According to SPÖ consumer protection spokesman Christian Drobits, other EU states would intervene with strict supervision, minimum interest on savings or an excess profit tax for banks. The Freedom Party is demanding an interest rate reduction for overdrafts to five percent and had already submitted an application to the National Council in 2020, which had been postponed four times by the ÖVP and the Greens, criticized FPÖ consumer protection spokesman Peter Wurm.
In June, the VKI warned Bank Austria on behalf of the entire industry, but so far without success. “The fact that banks are constantly increasing borrowing rates while leaving credit interest at zero is unacceptable. Profits are made here at the expense of consumers,” said Social Affairs Minister Rauch on yesterday’s public holiday. He is confident that these “improper business practices” will be banned in court.
decision this year
According to a comparison website run by the Chamber of Labor (AK), banks charge between 6.75 and 13.25 percent debit interest. Credit interest on salary accounts is between 0 and 0.1 percent. A decision by the first instance is expected this year.
“It is obvious that this business practice affects the entire Austrian banking industry,” criticized Rauch. “I have therefore commissioned the VKI to take legal action against it.” After all, “consumers are dependent on a checking account,” says Rauch. And banks used this dependency with their business policy.
Adjustments to savings interest
The banks have adjusted the interest rates for savings or announced a change. The ministry announced that it would review the situation again in September 2023. Then it should be decided whether legal measures should also be taken in the case of interest on savings. “We will continue to monitor the business policies of Austrian banks and intervene consistently if we see disadvantages for consumers,” announced Rauch.
Video: Analysis of bank lawsuits by Roland Adrowitzer
Source: Nachrichten
