Withdrawal joker: ECJ strengthens consumer rights in credit agreements

The European Court of Justice has strengthened the rights of consumers in credit agreements. The highest court in the EU specified in a ruling on Thursday which information must contain corresponding contracts. This includes, for example, exact percentages for default interest, as can be seen from the judgment of the judge. The calculation method for compensation due in the event of early repayment must therefore also be specified in an “easily comprehensible manner” for an average consumer (cases C-33/20, C-155/20 and C-187/20).

According to Christoph Herrmann from Stiftung Warentest, the judgment helps many debtors. “Most of them can now revoke their old loan agreements, even if it has been many years since the contract was signed,” he said. This could reduce the remaining debt, for example, which is due, among other things, to the fact that fees or interest on arrears are no longer applicable.

The background is car loan agreements

After the judgment, the Klner lawyer Christian Solmecke, who was not involved in the proceedings, said that the judgment would be particularly advantageous if customers wanted to conclude a new loan agreement in order to benefit from the current low interest rates. Almost no known loan contract model in the consumer sector can withstand the requirements set by the ECJ for individual mandatory information.

The law firm Gansel Rechtsanwlte, which was involved in the proceedings, announced that almost all private consumer loans were affected by the judgment. “The only exceptions are consumer loans with a mortgage, especially real estate.” This means that there are also many potential new clients for law firms.

The background to the ECJ ruling are several cases that are being negotiated at the Ravensburg Regional Court. Car loan agreements were revoked long after the deadline had expired. The reason given by consumers was that important information was missing in the contracts. Lenders were the VW, BMW and Skoda banks. BMW announced that it would have to wait and see how the proceedings in Germany would proceed in order to assess the effects.

VW Bank tests impact

On the part of VW Bank it was said that the effects were being examined. “However, we do not expect that numerous customers will declare their revocation.” Because customers would have to pay for the depreciation of a vehicle in the event of a cancellation, the cancellation does not offer any economic advantage. Christoph Herrmann from Stiftung Warentest, on the other hand, said: “You will, however, get your sales tax and retailer’s margin back in full.”

According to industry representatives, it is unclear how the decision will affect the banking sector as a whole. It remains to be seen how the Federal Court of Justice will deal with the decision of the European Court of Justice, announced the German banking industry.

With the judgment, the European Court of Justice corrects the “recently often consumer-unfriendly judgments of the Federal Court of Justice (BGH) on banking and capital market law” from the perspective of Stiftung Warentest. (dpa / swi)

Also read:

BGH judgment on kilometer leasing: No right of withdrawal for consumers

BGH judgment at the beginning of the withdrawal period: Incorrect clause makes loan agreements vulnerable

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Lenny Li

I started to play with tech since middle school. Smart phones, laptops and gadgets are all about my life. Besides, I am also a big fan of Star War. May the force be with you!

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