14. Apr 16

OLG Frankfurt: No forfeiture of right of withdrawal in cases involving consumer loans

According to a ruling of the OLG Frankfurt (Higher Regional Court of Frankfurt), the right to withdraw from a loan is not forfeited even after years have passed since the conclusion of the loan agreement (Az.: 23 U 24/15).

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: Banks frequently argue that the right of withdrawal has been forfeited in order to avoid withdrawal from a loan, pointing out that the right was not exercised over a number of years. The Oberlandesgericht Frankfurt has put a stop to this line of reasoning with its ruling of September 2, 2015.

The OLG held that the passage of time between the issuance of guidance on the right of withdrawal and withdrawal from the loan does not by itself mean that the right of withdrawal has been forfeited; in fact, it was the bank’s use of flawed instructions on the right of withdrawal that gave rise to the situation that led to the withdrawal. To this extent, it could not claim to be deserving of special protection after it had failed to properly inform the consumer about his option to withdraw.

In the case in question, the consumer had withdrawn from a loan agreement from 2006 in July 2014, claiming that the bank had not properly informed him about his option to withdraw, which meant that the withdrawal period never commenced. The information concerning the commencement of the withdrawal period was also said to be ambiguous. He went on to say that the bank had deviated from the standard guidance by issuing further instructions on withdrawal under the heading “Hinweis auf zu leistenden Wertersatz im Falle des Widerrufs des Darlehens und Zustimmung zur Auszahlung des Darlehens vor Ablauf der Widerrufsfrist” (Note on compensation to be paid in the event of withdrawal from the loan and approval of its disbursement before expiry of the withdrawal period).

According to the OLG, this was simply “too much” unnecessary guidance that needlessly confused the consumer and thus represented an erroneous deviation from the standard guidance. The Court also stated that the guidance regarding the commencement of the withdrawal period was ambiguous, meaning that the withdrawal had been carried out effectively.

Banks and savings banks made use of flawed instructions on the right of withdrawal in a lot of real estate loans concluded between 2002 and 2010. As a consequence, it is still possible to withdraw from these loans in most cases. Having said that, consumers should not wait much longer to do so, as the right of withdrawal for legacy contracts is set to expire on June 21, 2016.

A lawyer who is competent in the field of banking law can assess whether the prerequisites for withdrawal have been met.

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