Conduct complaints and dispute resolution in Germany — BaFin, Schlichtung and the ombudsman schemes

Germany’s conduct-side obligations sit in two layers: the firm’s own complaints-handling function, and a separate out-of-court dispute-resolution (Schlichtung) system a customer can escalate into. BaFin is the conduct supervisor for banks, payment and e-money institutions (ZAG) and investment-services firms (WpHG). But most consumer disputes are not resolved by BaFin — they are resolved by a recognised private ombudsman scheme, with the BaFin arbitration board as the fallback where no private scheme is competent. A payments firm operating into Germany has to build the complaints function, wire the statutory reply deadlines, and signpost the correct Schlichtungsstelle. This is the operational walkthrough.

1. Who supervises conduct in Germany

Conduct supervision in Germany is concentrated in one authority, unlike France’s ACPR/AMF split:

• BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht) — conduct supervision across credit institutions, payment and e-money institutions authorised under the Zahlungsdiensteaufsichtsgesetz (ZAG), and investment-services firms under the Wertpapierhandelsgesetz (WpHG). BaFin has an explicit collective consumer-protection mandate.
• Consumers can complain directly to BaFin (Beschwerde). BaFin takes the complaint up with the firm, asks for a statement, and forms a supervisory view — it does not award the customer compensation, but the pattern of complaints feeds supervision.
• The Bundesamt für Justiz (Federal Office of Justice) recognises the private dispute-resolution entities and publishes the register.

The important structural point: BaFin supervises whether the firm has an adequate complaints framework; the money question between the customer and the firm is settled either bilaterally or through a Schlichtungsstelle.

2. Legal basis

• ZAG and KWG (Kreditwesengesetz) — conduct and organisational duties for payment/e-money institutions and banks
• WpHG and BaFin’s MaComp (Mindestanforderungen an die Compliance-Funktion) — conduct rules and the complaints-management module for investment-services firms, transposing the MiFID II conduct framework
• Verbraucherstreitbeilegungsgesetz (VSBG) — the German Alternative Dispute Resolution Act, transposing Directive 2013/11/EU; §33 VSBG is the basis for the Federal Office of Justice list of recognised consumer dispute-resolution entities
• Zahlungskontengesetz (ZKG) — the Payment Accounts Act, with its own dispute route for basic-account (Basiskonto) matters
• EBA Joint Committee Guidelines on complaints-handling — adopted by BaFin into its administrative practice; they set identical complaints-management requirements across banking, payments, investment and insurance
• PSD2 Article 101 — the statutory reply deadlines for payment-services complaints, transposed into German law

3. The firm’s own complaints-handling function

Under the EBA complaints-handling guidelines, every in-scope firm — including a payment or e-money institution passporting in — must operate a documented complaints-management policy and a complaints function independent enough to assess a grievance objectively. The concrete build:

• A written complaints-management policy approved by management
• A complaints register capturing category, product/service, channel, date received, date of final response, and outcome (upheld, partially upheld, rejected, settled)
• Analysis of root causes, fed back into product and process design
• Reporting of complaints data to BaFin on request, and internal MI to management

For payment-services complaints, PSD2 Article 101 sets a hard clock: a final reply within 15 business days of receipt, extendable to 35 business days in exceptional cases where the answer cannot be given in time, with an interim holding reply explaining the delay. For WpHG investment-services complaints, the MaComp complaints module (implementing the ESMA MiFID II complaints guidelines) requires prompt handling, an identifiable complaints function, and the register.

4. The out-of-court dispute-resolution landscape

Germany does not have one financial ombudsman. It has a set of sector-specific private schemes recognised under §33 VSBG, plus a public fallback. Which one is competent depends on which association the firm belongs to — and a firm belonging to none defaults to the BaFin arbitration board.

Procedures are free of charge for the consumer in every case. The customer must normally have complained to the firm first and given it a window to resolve before the Schlichtungsstelle will open a file.

5. The BaFin arbitration board — the fallback

The Schlichtungsstelle bei der BaFin handles disputes between consumers and credit institutions or financial-services providers for which no recognised private dispute-resolution entity is responsible. For a foreign payments firm operating into Germany that is not a member of a German banking association, this is the scheme its German customers will use. Practical mechanics:

• The consumer applies in writing; the board checks admissibility (prior complaint to the firm, no pending court case or administrative proceeding on the same matter)
• The board asks the firm for a statement and proposes a resolution
• The proposal is non-binding — neither side is forced to accept — but participation and outcomes are visible to supervision
• Contact for the board is published on BaFin’s site (schlichtungsstelle@bafin.de, +49 228 4108 0)

6. Signposting duty and basic payment accounts

A firm serving German consumers must tell them, in its terms and on its website, which dispute-resolution entity is competent and how to reach it — an information duty that flows from the VSBG. Getting the signposting wrong (naming a scheme that does not cover the firm, or omitting the reference) is itself a conduct finding.

A distinct route runs for the basic payment account (Basiskonto) under the ZKG: a consumer refused a basic account, or whose account is terminated, can pursue both an administrative procedure at BaFin and, separately, the Schlichtung route. The two are not mutually exclusive, and the firm can face both at once on the same customer.

7. What BaFin does with the data

Complaint volumes and patterns feed BaFin’s risk-based supervision and appear in aggregate in its annual reporting. A cluster of complaints on one product, or a spike in adverse Schlichtung outcomes, is a supervisory signal that can trigger a thematic enquiry, a special audit, or a request for a remediation plan. The firm should therefore treat its own complaints MI as an early-warning system, not a compliance archive.

8. Worked examples

Example A — a passporting EMI signposts the wrong scheme. An e-money institution authorised in another member state serves German consumers on a Freedom-of-Services basis. Its German terms point customers to a home-state ombudsman. A customer with a disputed card chargeback wants to escalate in Germany. Applicable rule: the VSBG signposting duty plus the residual competence of the BaFin arbitration board for firms in no German private scheme. What the firm does: correct the terms to name the Schlichtungsstelle bei der BaFin, add the reference to the complaint-response letters, and log the correction. Outcome: the customer can now reach a competent German entity, and the signposting finding is closed before it becomes a supervisory theme.

Example B — a payment complaint misses the 15-day clock. A payment institution receives a complaint about an unauthorised direct debit. The investigation runs long and the firm sends its substantive answer on day 22 with no interim reply. Applicable rule: PSD2 Article 101 — 15 business days, extendable to 35 only with a reasoned interim holding reply. What the firm does: because the extension was never invoked properly, this is a breach; the fix is to hard-code a day-12 checkpoint into the workflow that either closes the case or fires the holding-reply template. Outcome: future late cases stay inside the 35-day ceiling with a documented reason, and the register shows compliant timing.

Example C — an investment-services suitability complaint. A WpHG investment firm gets a complaint that a portfolio recommendation was unsuitable. Applicable rule: the MaComp complaints module plus the MiFID II suitability framework. What the firm does: registers the complaint under the suitability category, pulls the suitability assessment and the recorded advice, responds within the firm’s committed window, and — if the customer is unsatisfied and the firm is a Bankenverband member — signposts the Ombudsmann der privaten Banken. Outcome: a clean audit trail linking the complaint to the underlying suitability record, which is exactly what a BaFin conduct inspection samples.

9. FAQ

10. What to do, today

• Build the complaints register around the fields BaFin samples — category, channel, response time, outcome — not free text.
• Hard-code the PSD2 Article 101 clock: a day-12 checkpoint that either closes the case or fires the holding-reply template so nothing drifts past 35 business days.
• Confirm which Schlichtungsstelle is competent for your firm and signpost it correctly in terms, on the website and in complaint-response letters.
• Treat basic-payment-account refusals as a dual-track risk — administrative procedure at BaFin plus Schlichtung.
• Wire complaints MI into management reporting as an early-warning signal; a product-level cluster is a supervisory theme in waiting.

Related: EMI licence in Germany (BaFin, ZAG) · Conduct and complaints reporting France (ACPR) · Conduct and complaints reporting Spain (DCMR)