The Supreme Court recently addressed the issue of the admissibility of processing fees again, deemed them inadmissible, and awarded a borrower €10,830.00.
On February 8, 2019, the plaintiff entered into a loan agreement with the defendant bank for €361,000.00. The agreement stipulated a processing fee of €10,830.00, in addition to further individual fees for property inspection and valuation, land registry verification, and processing via an escrow agent. The plaintiff sought repayment of the processing fee. He argued that this fee was non-transparent pursuant to Section 6 Paragraph 3 of the Consumer Protection Act (KSchG), as a clear distinction from the other fees was not possible, and that it was abusive pursuant to Section 879 Paragraph 3 of the Austrian Civil Code (ABGB), since no specific additional service was provided.
The defendant bank countered that the processing fee covered the bank's actual expenses for processing the loan, took an average of about 19 hours, and was part of the main service. In its view, there was neither gross discrimination nor a lack of transparency as defined in Section 6 Paragraph 3 of the Consumer Protection Act (KSchG), and there was no overlap with the other fees.
The court of first instance dismissed the claim, arguing that the processing fee, as the primary service, was clearly distinguishable from the other components of the fee. The court of appeal upheld this decision, stating that the term "processing fee" was generally understood and that there was no overlap with other charges. The plaintiff then appealed to the Supreme Court. The Supreme Court granted the plaintiff's appeal and ordered the defendant bank to refund the processing fee to the plaintiff.
According to Section 6 Paragraph 3 of the Austrian Consumer Protection Act (KSchG), a contractual provision is invalid if it is unclear or difficult for the consumer to understand. Previous decisions of the Second Senate (2 Ob 63/25s, 2 Ob 92/25f) had already deemed similar processing fee clauses used by the defendant to be opaque. The Supreme Court (OGH) found that a distinction between the processing fee and the individual fees for property inspection, land register verification, or escrow services is not comprehensible to the consumer. The differentiation presented by the defendant was unconvincing, as the general terms and conditions do not disclose which specific services are covered by the processing fee.
Since the clause was already invalid due to a lack of transparency, an examination under Section 879 Paragraph 3 of the Austrian Civil Code (ABGB) was unnecessary. The defendant's arguments regarding the time limitation of the repayment obligation in cases of abuse were therefore irrelevant.
The ruling clarifies that loan processing fees that are not clearly distinguished from other individual fees are opaque to consumers and therefore invalid. The mere designation "processing fee" without a transparent breakdown of the services covered does not meet the requirements of Section 6 Paragraph 3 of the Consumer Protection Act (KSchG).
Supreme Court 16.12.2025, 4Ob74/25y