In its decision of January 23, 2024, 2 Ob 238/23 y, the Supreme Court recently commented on the question of whether or not credit processing fees can violate consumer protection law.
The plaintiff was an association entitled to bring an injunction under Section 29 Paragraph 1 of the Consumer Protection Act. The following clause was to be examined in the proceedings:
“One-time processing fee of EUR 4,000% of the loan amount charged to the loan account (Clause 1).
Collection fees of € 75.00 (Clause 2a), transfer fees of € 15.00 (Clause 2b) and postage and printing costs of € 25.00 (Clause 2c), which will be deducted from the credit disbursement amount.
Account management fee: € 7.00 per quarter (Clause 3)"
The plaintiff requested that the use of this clause be stopped, whereby both the first and second courts (Higher Regional Court of Vienna and Higher Regional Court of Vienna) judged the first and second paragraphs of the clause used to be inadmissible. However, the Higher Regional Court of Vienna allowed an ordinary appeal to examine the compatibility of this decision with the decisions of the Higher Regional Court of Justice concerning comparable facts in cases 4 Ob 59/22 p and 6 Ob 13/16 d.
The Supreme Court did not allow the appeal, but nevertheless took a position on the issue of credit processing fees in a way that was essential to the decision and worthy of note in the future:
He first noted that, although a lender was not obliged to provide detailed information on all the services it would provide in return for a fee paid to it, it was important that the consumer was able to check whether there was any overlap between different fees or services remunerated by them.
The term “credit processing fee” is sufficiently transparent in itself, because the borrower understands this to mean that he is paying the fee for the work and effort involved in processing and providing the loan. However, it is necessary for the consumer to understand – based on the entire contract – which service is associated with which fee.
In addition to the obligation to pay a credit processing fee, the disputed clause now also contained further fees in the form of collection and transfer fees as well as costs for printed matter and postage. It is therefore unclear which specific, additional service or expense category is to be compensated for with the processing fee. This also serves (as a flat rate) to compensate for the work and effort involved in processing and providing the loan and would therefore in principle also cover the services charged with the additional fees. The extent to which there are overlaps or double billing between the credit processing fee and the other fees can therefore no longer be checked clearly enough for the consumer. The agreed processing fee is therefore non-transparent due to the inability to check overlaps with the other fees.
What is important in the present case is that in a so-called "association process" clauses are to be interpreted in the most customer-unfriendly way (and then checked for their admissibility in this interpretation). Whether the courts seised also assume invalidity in individual cases (in which a borrower requests repayment of loan processing fees) is a question of the individual case. For this reason, legal advice (or advice from an authorized consumer protection organization) is recommended, even if it cannot be ruled out that, given the value in dispute in such individual cases (cases up to a value in dispute of € 5,000.00 can be conducted without legal representation), it may be possible to assert the claim in court without legal support.