The Federal Financial Supervisory Authority (BaFin) warns of the biggest money traps in a current risk report. You should be particularly careful with these three points.
It is always a good strategy to keep an eye on your own finances and to critically question where you invest your money. Although there have been various investment products in the past that people had to warn about, digitalization in the financial sector is changing the situation significantly.
The German financial regulators are currently warning There are several risks that consumers should definitely be aware of in 2026. From small loans to crypto and social media investment tips to overpriced life insurance, several money traps lurk in different areas of life. If you want to protect your money, you should, above all, look closely.
1. Over-indebtedness through small loans
In its current report, BaFin identifies consumer financing via loans as one of the increasing risks for consumers in 2026. The focus is primarily on smaller forms of credit through which more and more households regularly spend money, such as installment loans, credit card payments with partial payments and so-called “Buy Now, Pay Later” offers.
According to BaFin, many consumers often do not have enough information about the actual costs and risks of this financing. Especially with short-term or seemingly simple loans, overdrafts and rising debt levels can easily occur if interest rates and repayment terms are not clearly understood.
The supervisory authority emphasizes that missing or inadequate creditworthiness checks for some providers can also increase the risk of over-indebtedness. As a result, there is a growing risk that households will no longer be able to meet their financial obligations, a risk that could worsen as the use of smaller forms of credit increases.
Tips for protection: Avoid loans wherever possible. If it has to be a loan, compare the conditions and choose the offer that is best for you.
2. Crypto investments and social media tips
BaFin warns that social media and finfluencers are increasingly influencing consumers’ investment decisions, which is often associated with negative consequences. Platforms like YouTube, Instagram or TikTok are increasingly serving investors as a source of information about stocks, crypto investments and other financial products, but not all of the tips shared there are serious or reliable.
- Misleading investment recommendations: Influencers often promote speculative investments, especially in crypto, and promise high profits without explaining sufficient risks. This can lead consumers to make risky and unsuitable investments.
- High risk of loss: Especially with crypto assets, there is a risk that investors will lose capital if they rely solely on social media trends and supposed expert tips.
- Regulatory response: BaFin emphasizes that it wants to keep a better eye on finfluencers and digital providers, especially where content acts as specific investment recommendations or advertising for financial products, as they can otherwise cost investors dearly.
Tips for protection: Consumers should critically examine social media financial tips, use independent information and not blindly follow trends as this can lead to losses or dubious investments. Only those who understand what they are investing in and know the risks can make informed decisions.
3. Low return life insurance
Capital-forming life insurance is another risk for consumers in 2026, but BaFin does not see any increase compared to the previous year. The focus is on the fact that these products must offer clear and lasting customer benefits.
A capital-forming life insurance product is considered useful for consumers if it offers economic advantages over the entire term of the contract, i.e. it actually contributes to retirement planning and wealth creation, without excessive costs or unfavorable contract components reducing the benefit.
BaFin observes that in the past there were deficiencies in the customer benefit of some life insurance products. This can arise when product designs, cost structures or distribution practices result in insured parties benefiting less than expected or returns are significantly reduced by high fees.
Tips for protection: Here too, anyone who takes out life insurance should compare and understand the exact cost structure. This is the only way to avoid unprofitable products.
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