Ill-Advised Investment A German Pensioner Takes on Commerzbank
Irmgard Greiner, 92, trusted Commerzbank with all her savings for over six decades. Then the bank recommended a lucrative investment -- for a duration of 20 years. The retired teacher found out too late she can't access the money until she turns 108. Now she is waging a battle to regain control of her assets.
Irmgard Greiner, a German pensioner who lives in a suburb of Dortmund, recalls the day four years ago, just before her 88th birthday, when a financial advisor from Commerzbank sat on her settee giving her financial advice.
She recommended that Greiner invest 40,000 ($53,000) in a so-called closed fleet fund, administrated by a trust company, with no option for cancellation -- meaning the octagenarian wouldn't have access to her money for two decades. Greiner says she wasn't told about that last part, the bit about not being able to cancel the investment, on that afternoon. But it is included in the 66-page prospectus.
Irmgard Greiner doesn't hear well, but she has good eyesight, even without glasses. However, there wasn't time to read the small print that afternoon, she says.
"The purchase of the investment was the express wish of Frau Greiner," the bank counters. "She wanted to make a long-term investment because there are no heirs and the assets were to go to a foundation in the event of her death."
The bank adds that the financial advisor "weighed all the advantages and disadvantages of the investment together with the client. That particularly involved the long duration of the investment. Irmgard Greiner decided after the extensive consultation to invest a small part of her wealth firmly in this stake."
According to the Federal Court of Justice, Germany's highest court for criminal and civil law, there must be a delay of several days between the handover of a prospectus for such an investment and its completion. But Irmgard Greiner signed the forms and completed the investment that very day. She had always gone about her financial decisions in that way -- without seeking advice from others.
Bank Insists it Behaved Properly
The bank says there were "several conversations" about the investment, and that Irmgard Greiner, like every customer, could have revoked the contract within 14 days of signing it. "So Frau Greiner had enough time to think about her decision," the bank says.
Irmgard Greiner remained loyal to her bank -- Dresdner Bank, which was then purchased by Commerzbank -- for more than six decades. She and her husband made all their investments with the bank, and when the investments came due, they immediately reinvested the money.
She has no heirs, and after her husband died, she decided that she would leave her entire wealth, around 500,000, to a foundation, to be set up and managed by Commerzbank, for a children's charity and a society that maintains war graves.
But she wanted to retain full control over her assets until her death. That was important to her, maybe because she knows all too well what it's like to have no money. Her father was killed in World War II, and her mother had to work hard in a tile-making company to feed her three children. When a bomb devastated her home and killed her mother and two sisters at 9 a.m. on April 4, 1945, Irmgard Greiner, then 25 and a teacher, was standing in front of a classroom giving a math lesson.
"All I possessed were the clothes on my back," says Irmgard Greiner, 92 now. She is sitting in an armchair with her hands folded in her lap, and there is a glassy sheen on her blue eyes. "I was completely on my own."
She found work as a laborer on a farm owned by friends in northern Germany, and looked after their children. She wasn't paid "but I got something to eat and a roof over my head."
After the war, in 1946, she gave lessons to 120 children, without books, pens or paper. In 1951 she married a chemist from Dortmund. They had no children. "We lived for our work and devoted 150 percent to it," she says with a smile.
They lived modestly. They didn't go to the theater, cinema or restaurants, but they did travel. They explored Europe by car, flew to Japan, Australia and Canada, and once spent six months in the US. Her house is full of souvenirs and books, heavy photo albums, autobiographies of Russian and English authors and classics of German literature.
'I Trusted Them'
She is angry with herself for not studying the 66-page prospectus carefully enough. But she is also angry with the bank. "What annoys me most is how I was taken for a ride and not treated honestly." She said she had never had any trouble with the bank. "I relied on them, trusted them."
She discovered the problem with the investment when she reviewed her finances. She was getting pains in her legs and finding it harder to walk, and was considering employing a live-on care-giver. "That's expensive," says Irmgard Greiner, whose biggest wish is to die within her own four walls.
She came across the investment -- and it was only then that she understood that she had locked that money away for 20 years -- and would only be able to get hold of it when she turned 108.
Appalled at the discovery, she sat down at her desk by the window and wrote a letter to her bank on her old typewriter. But she was told the money was invested and couldn't be paid out before 2027. She tried twice more. Her appeals were polite and well-argued. But the bank remained firm. "The advisor behaved completely correctly during the consultation," the bank says.
Neighbors who do Irmgard Greiner's shopping advised her to contact a consumer protection agency. She did, and met Zuhal Wegmann, a lawyer specializing in bank and capital market law. She advised her to refer the matter to the ombudsman of the German banking federation.
An 'Old And Stupid' Category of Clients
"Frau Greiner was 91 at the time, I thought that would be the quickest and cheapest method," says Wegmann. She didn't expect to hear about the matter again. The ombudsman found in the old lady's favor and ordered the release of the 40,000 investment. Irmgard Greiner said she was ready to forego the interest. But Commerzbank again refused.
On October 25, 2011, Irmgard Greiner filed a complaint against Commerzbank and withdrew all her money from the bank. A court hearing is set for this spring.
Wegmann hopes Irmgard Greiner will live to see her money back. "This is an incredible case: Frau Greiner was a customer of this bank for more than 60 years, had all her money there and after her death would have transferred all her rights to it and let it manage her legacy," she says.
Greiner's case may be unique in its dimension but there are plenty like it, says Wegmann. "Older bank customers in particular who rely on advice often become victims."
In the banking world they are known as "A and D customers" -- alt und doof -- old and stupid. Irmgard Greiner may be old, but she's not the latter. She is annoyed at her own gullibility -- and has learned her lesson.