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Credit repaid prematurely

ECJ ruling on reimbursement of costs

In the event of premature repayment of a loan, credit institutions must reimburse all charged costs on a pro rata basis - i.e. also the processing fee or an agency commission. This was decided by the European Court of Justice (CJEU).

Part of the commission reclaimed

A consumer in Poland had to pay a commission to the bank for his loan. After this customer had repaid the loan prematurely, he demanded a corresponding part of this commission back from the bank. Now there is the European Consumer Credit Directive. It provides that in the event of early repayment of the credit, the customer has the right to a proportional reduction in costs.

The question to the European Court of Justice (CJEU) was therefore: Does this provision only apply to costs independent of the term of the loan, such as a monthly account maintenance fee? Or does it also apply, for example, to a credit processing fee to be paid at the outset or an agency fee, i.e. costs independent of the term? In times of low credit interest rates, such additional charges are becoming increasingly important for the bank.

No discrimination against the bank

The European Court of Justice (CJEU) has now ruled that all costs are to be reimbursed on a pro rata basis. This has so far been handled differently in Austria. If the reduction were to be limited to the term-dependent costs, according to the court, this would entail the risk that the bank would impose higher one-off payments on the consumer when concluding the credit agreement. The lender may be tempted to reduce to a minimum costs that depend on the duration of the contract. The Supreme Court ruled out the possibility that the lender might be disadvantaged by the reduction of all costs: According to the CJEU, the lender usually has a right to financial compensation for early repayment in the event of early repayment. In addition, the lender receives the loan amount back earlier so that it is available for a new loan.

Applying the judgment in Austria as well

"So far, banks in Austria have not paid back the credit processing fee to consumers in the event of early repayment of loans," says Dr. Beate Gelbmann, head of the complaints department at the Verein für Konsumenteninformation (VKI). "This does not comply with the European Consumer Credit Directive. It is conceivable whether this could be used in the past to derive claims by borrowers against their banks. However," says Gelbmann, "this must be examined even more closely. Because the Austrian regulation only mentions the term-dependent costs in connection with early loan repayment. For the future it should in any case be made clear quickly by law that all costs, and thus also those independent of maturity, must be reduced in the event of early repayment of credit."

Read the full text of the ruling at the website of the CJEU.

This article in its German original version was made available to us by the Austrian Verein für Konsumenteninformation (VKI) and first published on the website of the test magazine KONSUMENT on 13.09.2019.

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