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Real estates - mass  fraud in Germany       hits since September 2000  


Protest and fight against mass fraud with real estates all over Germany

Are 'honourable' German banks involved in mass fraud?




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Mass fraud with capital investment in Germany

We would like to draw attention to the enormous risks for foreign customers . There is big danger of fraud in Germany, as far as consumer credits are concerned which are sold in direct combination with real estates or real estate funds on a door-to-door-sales basis. In fact  in Germany during the last 14 years about 300.000 to 1 million German investors across all types of income groups have suffered from severe investment fraud.

This fraudulous system, which still operates today, is a 'fine' balanced and scandalous cooperation between fraudulous mediators and 'honourable' German banks, life insurances and investment companies, supported and secured by socalled politically and lobby influenced consumer laws and court decisions. In reality these are deeply consumer hostile and a violation of EU consumer protective guidelines. The European Court decided in December 2001 in favour of German consumers against the HypoVereinsbank. This excellent decision to rightfully protect the German consumer was unfortunately rejected by German law and the German High Court in 2002. As German citizens and consumers we have had to experience that during the previous years German courts and German politicians are either ignoring European rights or have no respect for them, particularly when it concerns the profits of banks and insurance companies.

Meanwhile the former secretary for Internal Affairs for chancellor Helmut Schmidt, lawyer Mr. Gerhart Rudolf Baum, has submitted legal proceedings against Germany because of highly questionable European laws on consumer protection. Consequently the EU-Commission published a statement in January 2004 (C-350/03) , which can only be an embarrassment for the German government and the German High Court. Many serious and sound German newspapers have reported on this affair. Please see:

And this is how the system works:

Mediators, who sell a whole package of tax-saving and real-estate 'performances,' contact potential customers by telephone, relatives or colleagues in order to make a sales appointment.Once the contact has been made they visit the potential investors(victims) in their homes or even at work. Here the customers then get the offer of a small tax-saving apartment or a real etstate fund with a monthly charge of not more than 50 - 100 €uro. In combination life insurances are also sold as repayments after 30 years. The whole offer is presented in highly professional glossy brochures. Such sales documentation is intentionally designed to attract, mislead and confuse the client. The often inexperienced clients usually come from distant locations all over Germany and have little knowledge of the property market regarding the location of the investment object.

The seller co-ordinates a "favourable" financing loan with a well-established and 'honourable' bank. This develops into the convincing sales argument. i.e.The trustworthy bank is in most cases the decisive factor for signing the contract, the clients are smooth-talked into feeling safe and don't realize the dangers of fraud. Nevertheless, consultation in the bank never takes place, this could lead to rights of recourse later . The whole business -including the loan is executed by door-to-door-sales. The mediator only appears as a bank assistant at the client's home. Then the icing on the cake, the absolute "best-seller" a 5-year rental income warranty is included in the package. In many cases the rental warranty was honoured for one year. What the investors weren't aware of was that what was going on could have only been possible with the secret subsidization of the rents by the sales companies (already unknowingly financed by the inexperienced and unsuspecting clients). The rental warranty simulates a false sense of security. It keeps the clients in the dark until it's too late to react. Within 12 months of signing the contract they could have legally cancelled.

After 12 months the secretly subsidised rents are no longer paid. Only then the clients become suspicious and begin to check the contracts and value of their investments. They learn that the rental guarantor company and housing management very often are economically and closely connected. They learn that these companies cooperate with the builder and sales companies,(together with the banks in the background) against the financial interests of their customers. Calls and letters to the rental guarantor company remain unanswered, no-one receives any information, which explains the constantly rising rental arrears. Sooner or later the desperate clients realize that their apartments were highly over financed. Sometimes the real value is no more than 20 % of the investment. This difference eventually leads to an inevitable bankruptcy . Even more disastrous, without the promised and guaranteed rents the loans become nonperforming loans. The clients very often cannot pay any longer for the accumulating and outstanding interest loan. Compulsory enforcements by the banks then threaten the client's existence. The last alternative, a lawyer i.e. more costs.

Things move slowly. Lawyers make the seriousness and extent of the fraudulent damage apparant to the client, nationwide in Germany, involving German banks, investment companies and life insurance companies. The result: Sales companies and rental guarantors are bankrupt. Their return on investment (ROI) has disappeared. Even when the court decision is in the client's favour there appears to be no chance of reimbursement or compensation. On the contrary the plaintiff has to pay the legal costs. The banks (the experts) remain stubborn and continue to demand payment, knowingly driving clients and debtors into sure bankruptcy. So the clients must continue to pay 30 years for an investment worth only 20% or less of the original loan. Additionally you have to know that the apartment buildings are constructed as cheap as possible. Immense costs for improving the buildings have to be paid by the clients, who are actually already without means.

Note:The second largest German bank, HypoVereinsbank (Munich) has produced and is responsible for 108.000 cases of very problematic/questionable loans for overpriced apartments. Reports also inform that other German banks have directly been  responsible for many of these cases.

This disasterous game has been going on in Germany for almost 14 years, there seems to be no chance of stopping it. As long as German politicians and courts don't take effective measures to protect private investors against investment fraud by certain banks, life insurances and investment companies, nothing will happen but the continuation of mass criminal actions that will certainly destroy the existence of hundreds of thousands of private investors and their families throughout Germany.


We appeal to German and European politicians:

Should this fraudulous German system become a standard for the rest of Europe?

Please give this matter your utmost consideration. Regarding introducing new laws German experience has demonstrated:

The closer you work with banks the further away you are from customers.

Strict customer friendly guidelines are the only way to stop mass fraud, commited or assisted by banks.

Strict customer friendly guidelines are the only way to force German and other European banks to offer fair and transparent deals to their customers. There is no other way, you can be sure!

What's happening in Germany can only be defined as legalized criminality. Mass fraud with overpriced ond overvalued real estates. This should never be allowed to become a standard for the rest of Europe.


Who will ever stop this?

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*) opfer = victims  //   'peanuts' = a citation of former Deutsch Bank chairman Hilmar Kopper.  In 1995 "peanuts" was selected as the "Unwort' ("un-word" or "no-word") of the year 1994. A jury led by Horst-Dieter Schlosser, a linguist from Frankfurt, selected "peanuts" from a pool of more than 1000 suggestions. Hilmar Kopper, chairman of the board of directors of the Deutsche Bank, had used the word "peanuts" (until then not a German term) in order to characterize Deutsche Bank's losses because of outstanding craftmen's bills which the vanishing real estate agent Juergen Schneider had left to his bank.