On November 05, 2015 Saxony’s consumer association presented study results on the subject of “Transparency of online advertising on overdraft facility” as part of the project Watchdogs for Financial Markets. For this purpose, between May and August 2015 the consumer association analyzed the websites of 371 German banks. The aim was to examine what information on overdraft facilities banks present online and how accessible and comprehensible this information is for consumers. Reviewing the advertisements for 1.346 current accounts, the report reaches the following results:
- In online advertising, financial institutions provide mostly insufficient and hardly transparent information on overdrafts, which also are hard to find for consumers.
- Almost all banks publish details on the borrowing rate, but they do not indicate at which dates and under which circumstances these rates are being adjusted.
- As a benchmark value for borrowing rates, the reference interest rate is only presented in one quarter of the inspected accounts. Since banks use reference rates that do not or only insignificantly fluctuate, consumers do not participate sufficiently in market developments.
Dorothea Mohn, head of the financial markets team at the Federation of German Consumer Associations (vzbv), commented on the study results as follows: “Consumers have to be able (…) to follow up on changes of the borrowing rate. Only then, they can make proper use of overdraft facilities and take the offered conditions as a decision criterion for choosing a certain product. At the moment we are far from price transparent overdrafts, which is why we need concrete legal provisions.“