To clarify, she was saying not only that some third party, presumably the West German government, was actively recording phone conversations, but also that you could literally hear the recorder turn on. She also said that "when they ran out of tape, they just disconnected you" because whoever was listening didn't want to miss anything. Neither she nor any relations were dissidents or contentious individuals, as far as I'm aware. I asked this question a month ago but received no reply. Any answers are appreciated!
West Germany had and has very strict laws for the defense of your private sphere. Secrecy of correspondence is warranted in the 10th article of the German constituion (literally: basic law) and a breach thereof is punished with up to 5 years in jail according to ยง206 of the StGB.
So it might have been a tongue in cheek reference to the NSA scandal or she is from a communist family, since, in 1968, the West German government decided that this law does not apply to folks suspicious to the state security service.
I've heard this kind of thing in terms of East Germany and Soviet Russia, are you sure she was talking about West Germany? This bit about disconnecting the call after running out of tape especially sounds like an old joke about the Stasi or NKVD. There are quite a few jokes about state surveillance behind the Iron Curtain, like the "comrade major" tea prank.