Consumer credit agreements: Reclaim of processing fee time-barred no earlier than 31.12.2014

4 November 2014

In two judgments of 13 May 2014, the Federal Supreme Court (BGH) has already ruled that general terms and conditions concerning a processing fee in loan agreements between a credit institution and a consumer are invalid (Az. XI ZR 170/13 and XI ZR 405/12).

In a further case, the Federal Court of Justice (BGH) also ruled on the statute of limitations for claims for restitution in its ruling of 28 October 2014 (Case No. XI ZR 17/14). Accordingly, it was not reasonable for the borrowers to bring an action for repayment because of processing fees wrongly demanded prior to 2011, because it was not until this year that a consolidated case law had developed which disapproved of processing fees in General Terms and Conditions when consumer loan agreements were concluded. As a result, the start of the limitation period for the repayment claims of bank customers was postponed until the end of 2011, so that the knowledge-dependent limitation period under Section 199 (1) of the German Civil Code for earlier claims for repayment did not begin until the end of 2011. On the other hand, such claims for restitution are time-barred if, calculated from the point in time at which they arose, no measures were taken to inhibit the statute of limitations within the absolute, knowledge-independent 10-year limitation period of § 199 (4) BGB.

The complete judgement is available here.