According to the Bundesgerichtshof’s (BGH) ruling of March 16, in which it bolstered consumers’ right of withdrawal, consumers’ reasons for availing themselves of their right of withdrawal are irrelevant.
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: It is not necessary for consumers to justify their decision to make use of their right of withdrawal. The Bundesgerichtshof, Germany’s Federal Court of Justice, has now made it clear that, as a matter of principle, the reasons for withdrawal are neither here nor there (Az.: VIII ZR 146/15).
The Panel also stated that excluding the right of withdrawal due to unlawful behaviour on the part of the consumer is only an option in exceptional cases where the company in question is particularly vulnerable.
The case before the BGH concerned a withdrawal from a purchase agreement. A consumer had ordered mattresses online and subsequently withdrew from the purchase agreement, alleging that the retailer had not stuck to its “lowest price guarantee”. The latter viewed this as an unlawful exercise of the right of withdrawal, arguing that the customer was only interested in the lower price. The consumer’s legal action to rescind the transaction was successful in every instance; the BGH concluded that the reasons for withdrawal were immaterial to the decision to exercise the right to withdraw.
Even though the ruling in question concerned a withdrawal from a purchase agreement, the BGH’s jurisprudence could also be applied to withdrawal from consumer loans. In order to see off an attempted withdrawal, banks and savings banks often argue that consumers have exercised their right of withdrawal in bad faith, claiming that they are not in fact concerned about flawed guidance regarding the right of withdrawal but are instead chiefly interested in more favourable interest rates. The BGH has now put an end to this line of argument. Irrespective of one’s motives, it is possible to withdraw if the right is exercised in a timely manner.
There are many cases of real estate loans, particularly those concluded between 2002 and 2010, with respect to which credit institutions made use of flawed guidance concerning the right of withdrawal. Consequently, it is still possible today to withdraw from these loans because the withdrawal period never commenced, which is why this so-called “ewiges Widerrufsrecht” (perpetual right of withdrawal) applies.
Having said that, withdrawing from legacy contracts is no longer likely to be possible from June 21, 2016 going by the German government’s plans. Consumers who still wish to withdraw from their loans ought to take action. Lawyers who are competent in the field of banking law can assess whether the conditions for withdrawal have been met.
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