20 years ago, the Federal Court of Justice ruled that customers with premium savings contracts were entitled to money retroactively due to invalid clauses. But how much?
For years, consumer advocates have been arguing with savings banks and cooperative banks in court over back payments due to ineffective interest clauses in premium savings contracts. The Federal Court of Justice (BGH) has now confirmed a reference interest rate for the retroactive calculation of interest for the first time. Specifically, it concerned two decisions by the Naumburg and Dresden Higher Regional Courts, which had determined an interest calculation based on the current yield of listed federal bonds with 8 to 15 years remaining term. The reference interest rate withstood the BGH’s review, according to the Senate.
With premium savings contracts, savers receive a premium, usually based on the term of the contract, in addition to the variable interest rate. The longer regular savings contributions are received, the higher the premium. Such savings contracts were sold in the 1990s and early 2000s – primarily by savings banks (“Vorsorgesparen”, “Vermögensplan”), but also by cooperative banks (“Bonusplan”, “VRZukunft”).
Money back – but how much?
Many of these contracts contain clauses that unilaterally grant banks the right to change the guaranteed interest rate at will. The bank could thus adjust the interest rate to its own advantage, i.e. reduce it. The Federal Court of Justice declared this to be illegal 20 years ago. However, the Supreme Court has not yet clarified how the interest for these products should be calculated instead.
The consumer centers wanted to change that. Since the reference interest rate set by the higher regional courts was not sufficient for them, they appealed against the relevant decisions. Instead, they wanted the Federal Court of Justice to determine that the interest is calculated on the basis of the last ten years of current yields on domestic mortgage bonds with a guaranteed remaining term of 10 years. They also demanded moving averages. The Federal Court of Justice rejected this on Tuesday, as did the lower courts.
The Eleventh Civil Senate in Karlsruhe found no reason to object to the reference interest rate used by the higher regional courts. The current yield on listed federal securities with a remaining term of 8 to 15 years as a basis meets the requirements for reference interest rates, explained the presiding judge, Jürgen Ellenberger. The interest rate does not benefit savers or the defendant savings banks. It also reflects the current interest rates on the risk-free capital market.
Consumer advocates appeal to savings banks
Despite the rejected appeal, consumer associations were positive about the verdict. It was a good day for cheated premium savers, commented the head of the Federal Association of Consumer Organizations, Ramona Pop. “The Federal Court of Justice has set a standard for how savings banks must recalculate incorrectly calculated contracts.” Now the savings banks must take action and initiate compensation.
The financial regulator Bafin also welcomed the BGH ruling. “The final decisions of the Federal Court of Justice are an important clarification for collective consumer protection,” said Bafin Executive Director Thorsten Pötzsch. “We will now evaluate the reasons for the ruling and examine whether we as a supervisory authority will take further measures.”
In the legal sense, the ruling is only binding for the two savings banks that were sued. However, since these are standard savings bank products, the consumer center believes that the court’s rulings could also apply to premium savings contracts from other savings banks. The Federal Court of Justice left open whether other reference interest rates could also be considered for the interest rate adjustments.
Source: Stern
