10-year limitation period for loan processing fees – information and sample letter
The Federal Court has ruled that no separate processing fees may be charged for consumer loans. Borrowers who have paid such fees may reclaim the money from their bank.
However, it was unclear how long borrowers can reclaim the fees and when the right to a refund is time-barred. The Federal Court of Justice has now also taken a decision on this question. Accordingly, a 10-year limitation period applies to loan processing fees. But what does that mean for the affected borrowers?
Here are the most important information in the overview:
- 1 Processing fees for loans are not permitted.
- 1.1 Recovery of credit processing fees is possible up to 10 years retroactively.
- 1.2 Sample letter for the recovery of credit processing fees
- 1.3 Editorial staff
- 1.3.1 Latest Editorial Articles (Show All)
- 1.4 Similar posts
Processing fees for loans are not allowed.
In mid-May 2014, the Federal Court of Justice (BGH) ruled that processing fees for consumer loans are inadmissible (Ref .: XI ZR 405/12 and XI ZR 170/13). According to the judges, banks and savings banks are not allowed to charge separate fees for a service that is not a service at all. Credit institutions are required by law to verify the creditworthiness of a borrower.
In addition, such preparatory activities are in the interest of the credit institutions. The consideration that a borrower provides for the use of a loan is only the interest that he has to pay. Additional processing fees rejected the judge as unjustified. As a result of the BGH’s decision, borrowers who paid processing fees for their loan are entitled to reimbursement of these fees to their credit institution.
The question of which limitation period applies to the claim for reimbursement remained initially open. The banks and savings banks assumed a three-year limitation period from the day on which the borrower became aware that processing fees had to be paid. A few courts, lawyers and consumer advocates, on the other hand, assumed that it was not until 2011 that a borrower could know that a claim for reimbursement existed.
A recovery of credit processing fees is possible up to 10 years retroactively.
With its judgments of 28 October 2014, the BGH now also ruled on the question of the statute of limitations (refs XI ZR 348/13 and XI ZR 17/14). Accordingly, the regular limitation period of three years applies to the claim for reimbursement (§ 195 BGB). The period begins at the end of the year in which the borrower has learned of his claim (§199 BGB). In its judgments, however, the BGH stated that knowledge of the claim can not be available until the end of 2011. Until then, the legal situation was not clear.
As a result, a bank customer could not be expected to initiate legal proceedings to enforce its claim for reimbursement of processing fees. Background for the statements of the BGH were two decisions of the Higher Regional Court Celle. This had initially declared processing fees for consumer loans to be admissible (decision of 2.2.10, ref. 3 W 109/09).
In October of the following year, the Higher Regional Court of Celle then revised its view and agreed that such administrative fees are not admissible (decision of 13.10.11, ref. 3 W 86/11). As a result, a clear legal position was only available from 2011, and consequently the limitation period for the claim for restitution can not commence until 31.12.2011. The claim of the borrower thereby becomes statute-barred at the earliest on 31.12.2014. Transferred to practice, the decision of the BGH means:
If a borrower was required to pay processing fees for his loan and has provided this payment during the period from January 1, 2005 to December 31, 2011, he may request a refund. His claim to the refund becomes time-barred as of 31.12.2014. To claim the refund, the borrower must contact his bank in writing. A sample letter can be found at the end of this article.
The letter to the bank but does not affect the statute of limitations. Should the bank or savings bank refuse the claim, the borrower must therefore still take measures in 2014, which inhibit the statute of limitations. Statutory measures include, for example, the activation of an ombudsman or a lawsuit. A letter alone is not enough to prevent the statute of limitations of the claims.
Sample letter for the recovery of credit processing fees
However, such a processing fee is not permitted. In its rulings Az. XI ZR 170/13 and XI ZR 405/12 of 13 May 2014, the Federal Court of Justice stated that the processing of a loan agreement and preparatory activities in connection with the lending are not separate services for the bank customer.
As a result, no separate fee may be charged for this. Furthermore, in its rulings Az. XI ZR 348/13 and XI ZR 17/14 of 28 October 2014, the Federal Court of Justice ruled that knowledge of the claim for a refund of the processing fees was only available from the end of 2011.
As a result, the statute of limitations for loan processing fees paid in 2005 and later has not yet come into effect. I therefore urge you to reimburse the withholding processing fees to my account _______ ( IBAN, bank name ) ______ within the next 10 days.