In a judgment dated July 28, 2015, the German Federal Court of Justice held that a bank’s general terms and conditions that set a fee of EUR 0.32 for every transaction are ineffective. In the case at issue, the terms and conditions also included transactions with erroneous entries and returned direct debits. For returned direct debits, a processing fee was charged in addition to the transaction fee.
Incorrectly executed payment orders
The Federal Court of Justice considered this clause to be contrary to the statutory provision according to which credit institutions are not entitled to charge fees for erroneously performed payment orders. Even though this provision was only introduced at the end of 2009, the Federal Court of Justice considered the breach to have occurred for the preceding period as well. During that period, the banks should at least have granted a free allocation for establishing and fulfilling loan or safekeeping relationships. That had not been done.
Corporate clients can profit
With this current decision, the German Federal Court of Justice’s continues its recent jurisdiction, which was already issued similarly for private accounts. Now, also business clients are included. At the described case, the complainant was awarded over EUR 77,000.00, which is to be paid back by the bank. For all our clients, it is therefore well worth checking whether the contents of the agreements with the credit institutions stand up to scrutiny. With our specialized attorneys, we are looking forward to helping you with that endeavour.
Federal Court of Justice XI ZR 434/14
German Banking Law – Support for banks and financial service providers