03. Oct 16

OLG Düsseldorf: Boost for consumers withdrawing from loans

Guidance on the right of withdrawal featuring the footnote “Nicht für Fernabsatzgeschäfte” (not for long-distance transactions) is ineffective. The Oberlandesgericht (OLG) Düsseldorf [Higher Regional Court of Düsseldorf] ruled that it is possible to effectively withdraw from loans accompanied by this kind of guidance.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: The OLG Düsseldorf has given fresh impetus to consumers seeking to withdraw from their loans. In its ruling of May 13, 2016, the Court held that guidance regarding the right of withdrawal featuring the footnote “Nicht für Fernabsatzgeschäfte” is ineffective and the withdrawal period had not commenced (Az.: I-17 U 182/15). It is therefore possible to effectively withdraw from loans accompanied by this kind of guidance on the right of withdrawal even years after the loans were taken out.

In the case in question, a consumer had taken out a real estate loan in 2008 and subsequently paid off this loan prematurely with an early repayment penalty. He then gave notice of withdrawal in 2014 and successfully sued for repayment of the early repayment penalty.

The 17th Civil Division of the OLG Düsseldorf held that the footnote “Nicht für Fernabsatzgeschäfte” was unclear for consumers, who could not be expected to fully understand the meaning of the term “Fernabsatzgeschäft” (long-distance transaction) without any further clarification. The Court noted that this is a technical legal term. It went on to say that the use of this footnote represented a revision to the content of the applicable standard guidance. As a result of this revision, the bank could not rely on arguments pertaining to the protection of legitimate expectations and withdrawal could not be said to have been carried out illegally or improperly. The Court concluded that the withdrawal had ultimately been effective and the consumer was entitled to reimbursement of the early repayment penalty.

Due to the fact that the case law concerning this guidance on the right of withdrawal has not always been consistent, the OLG Düsseldorf gave leave to appeal to the Bundesgerichtshof (BGH), Germany’s Federal Court of Justice, which only a few days ago bolstered the position of consumers when withdrawing from loans.

Following the most recent rulings of the OLG Düsseldorf and the BGH, consumers’ prospects of being able to enforce timely withdrawal notices vis-à-vis banks or savings banks have improved considerably. Should banks nonetheless choose to make things difficult and refuse to accept withdrawal, consumers can turn to lawyers who are competent in the field of banking law for assistance in enforcing their claims.

Having said all of that, notice of withdrawal needs to have been received by no later than June 21, 2016 for real estate loans concluded between November 2002 and June 2010.

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