04. Oct 16

Loan withdrawal: BGH pulls rug out from under banks and savings banks

According to a ruling of the Bundesgerichtshof (BGH), Germany’s Federal Court of Justice, from July 12, it is possible to effectively withdraw from loan agreements featuring the wording that the withdrawal period shall commence “frühestens mit dem Erhalt dieser Belehrung” [at the earliest upon receipt of this guidance] (Az.: XI ZR 564/15).

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: On July 12, the BGH delivered a groundbreaking judgment and bolstered the rights of consumers when withdrawing from loans. The BGH held that the guidance in question on the right of withdrawal featuring the wording that the withdrawal period shall begin at the earliest upon receipt of said guidance was not clear enough and could mislead consumers. It justified this by stating that the wording suggested the withdrawal period could commence at another unspecified point in time. As a result, the withdrawal period never commenced and it remains possible to withdraw from loans despite years having gone past since they were concluded.

In the instant case, a consumer had taken out a loan with the Nürnberger Sparkasse (Nuremberg Savings Bank) in 2008. The guidance concerning the right of withdrawal included the wording cited above as well as the footnote “Bitte Frist im Einzelfall prüfen” [Please check the withdrawal period in each individual case]. In 2013, the consumer withdrew from the loan agreement, claiming that he had not been properly informed about his withdrawal options. The judges at the Karlsruhe Court accepted this line of argument, ruling that the information pertaining to the commencement of the withdrawal period was not sufficiently clear. They went on to say that the guidance used deviated from the applicable standard guidance, and for this reason the bank could not rely on arguments based on the protection of legitimate expectations. The BGH concluded that the withdrawal had been effective, the right of withdrawal having been neither forfeited nor exercised improperly.

A large number of savings banks made use of the guidance on the right of withdrawal mentioned above. It is also possible to find similar guidance used by other banks containing ambiguous statements and deviations from the respective standard guidance. As such, consumers’ prospects of successfully withdrawing from their real estate loans concluded between November 2002 and 2010 are good, provided that the guidance is flawed or inadequate and notice of withdrawal was given by June 21, 2016. The BGH has pulled the rug out from under the banks and savings banks by dismissing their key arguments. The Court’s case law also makes it clear that even withdrawal attempts which have hitherto already been rejected can be looked at again.

Consumers who wish to enforce withdrawal from their loans can turn to a lawyer who is versed in the field of banking law.

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