Credit Processing Fees: “Banks are clearly on time”

Credit Processing Fees: “Banks are clearly on time”

Friday, 14.11.14, written by Cornelia Teich

Until the end of the year, many bank customers can reclaim inadmissibly raised loan processing fees from their financial institution. In an interview with, Berlin lawyer Philipp Caba explains how much money borrowers can get back and why they should reclaim the fees as quickly as possible.

Lawyer Philipp Caba gives tips on loan processing fees

Lawyer Philipp Caba gives tips on loan processing fees

Mr Caba, the Federal Supreme Court, has recently ruled that banks, even for older contracts, have to pay back undue credit processing fees to their customers. How can I find out if I can get money back from my bank?

Philipp Caba: First of all, you should take a look at your credit documents. On the first pages you will find the details of the loan amount, the interest rate and the amount of the installments. Under these terms, the contracts also include a field for any processing fees. If a processing fee in euros or percentages should be listed in this field, these fees plus interest may in principle be reclaimed by the Bank. All borrowers who agreed their contracts on the day just less than a decade ago have the best chance of recovering these processing fees at an interest rate. It does not matter whether the credit agreement is still running or not.

Service: Corporate credit agreements and loan agreements concluded more than ten years ago and repaid within the last ten years are also affected. Here, however, the legal situation is not yet clear. However, a case law under which contractors have been reimbursed for loan processing fees already exists. Therefore, it is also worthwhile to initiate statute-barred steps.

How much money can borrowers get back now?

Philipp Caba: The amount of the processing fee depends on the one hand on the amount of the loan and on the other hand varies within the respective banks between two and four percent of the net loan amount. I know many cases where the processing fee is about three percent of the loan amount. With a loan amount of 20,000 euros, that’s 600 euros. For example, if the loan was repaid in June 2007, additional interest will be payable at the latest from that date, which already amounts to more than EUR 250. It is well worth recovering this money from the bank now.

If I’m actually entitled to a refund, what do I have to do to get the fees back plus interest?

Philipp Caba: It’s so easy. Actually, there are two options that ultimately depend on what type of person you are. If you do not want to spend a lot of effort and do not care about anything, you should look for a lawyer. He initiates all necessary steps and, if necessary, even assumes the cost risk. If successful, the lawyer will receive a performance fee, typically 25 to 40 percent of the recovery amount. If you want to have it cheaper, you should set the bank itself with the help of a model letter in debtor default and only then hire a lawyer. In this case, you do not have to give anything of your reimbursement amount because the lawyer receives his reimbursement from the bank as default damages.

Sample letters on credit processing fees

On his homepage, lawyer Philipp Caba provides a sample letter free of charge with which borrowers can reclaim the unduly levied loan processing fees from their financial institution.

It is important that a letter to the bank, whether it be you or a lawyer, does not prevent the impending limitation period of 31 December this year. For this purpose, in contrast to a costly lawsuit, a judicial reminder application makes sense. The advance court costs are here less than 50 euros, if it comes to a processing fee of a maximum of 2,000 euros. This should not be important, as the lawyer can assess the chances of success quite certainly and these costs ultimately have to be reimbursed by the bank.

By the way: If you have a legal expenses insurance covering the assertion of contractual claims, so this comes up for all costs associated with the recovery legal fees.

The onslaught on the banks is certainly great at the moment, as many customers are reclaiming their money by the end of the year. What should people do if their bank does not respond to the recovery?

Philipp Caba: Banks are currently facing a lot of such recovery claims, so the process could indeed take longer. In addition, the banks are clearly playing for time, as they have nothing to fear at the end of the year. Because most claims expire at the end of the year. Of course, this will be helpful to the banks. Only claims for restitution incurred in 2012 or later are not yet time-barred.

In your experience, how do banks react when a customer reclaims the fees?

Philipp Caba: I personally know about the 100 cases in which the recovery of the processing fees was easily and often even without legal assistance. In addition, I have looked after a large number of such cases and have rarely had to enforce the right to reclaim their claims. The banks react – at least in clear cases – to the lawyer’s claim usually cooperative. In part, they try to work out a significant difference between their case and that decided by the Federal Court of Justice or to construct an individual contract based on existing business relations. Or they resist the interest burden. Not infrequently, in my experience, the banks try with flimsy arguments that almost all are simply wrong to deny the claim and abjure bank customers. This is probably wanted and tactic.

What steps would you recommend to borrowers to ensure that their repayment claim is not time-barred as of 31 December 2014?

Philipp Caba: It is possible to bring a legal action, a judicial order for payment or a complaint procedure to the competent ombudsman. The safest and most calculable outcome is, in my opinion, the initiation of a judicial reminder procedure. The bank is unlikely to take action against a writ of reminder, so as not to incur any additional costs at its expense.

The initiation of a dunning procedure can take place with or without legal assistance. The costs for this are significantly lower compared to filing a legal action. For example, if you want to recover fees of up to € 1,000, the court costs of the legal action are € 159. The legal fees for the order for payment amount to only 32 euros. The advantage of involving the ombudsman is certainly that this procedure is initially free of charge and represents the simplest form of inhibiting the threat of prescription.

Thanks for the interview, Mr. Caba!

Personal details: Philipp Caba is an independent lawyer specializing in litigation in the field of general civil law and as a public law reviser.

AXA car insurance in the test: results at a glance News always well informed

AXA car insurance in the test: results at a glance

Who is looking for a new car insurance, in addition to price and performance of the tariffs also like to look at the results in various investigations. The AXA car insurance can certainly convince in tests. However, customer experience indicates that AXA’s service should be even better.
AXA Kfz-Versicherung kann im Test nicht immer überzeugen
Be protected with a good car insurance in case of emergency

In the test of the German Institute for Service Quality (DISQ), AXA motor vehicle insurance secured a place in the Top 3 last year. Thirty-one auto insurers were tested for service and performance. In addition, the experts distinguished between providers whose tariffs can only be concluded online and those who use a branch network to provide personal advice on the spot – such as AXA car insurance. In the test, the company finished in a respectable third place behind HUK-Coburg and DEVK. The mobile comfort tariff was also able to achieve third place in the individual analysis ‘insurance coverage’.

AXA car insurance in the test at financial test

In the motor insurance test of the financial test from the previous year, the testers examined, among other things, the amount of contributions. AXA’s “Mobile Online” and “Mobil Online Plus” rates, both available online, scored higher than the average of all 150 rated offers . However, the tariff tested at the DISQ proved to be a worse-than-poor car insurance comparison. However, the experts in the test did not make an overall assessment of the AXA motor insurance – neither for this provider nor for the 70 other insurers examined. Too much depends on the contribution level, for example, on individual factors such as age and place of residence to create a ranking.

For this reason, the personal tariff comparison is important to find a cheap offer with the desired benefits. For example, Stiftung Warentest offers a corresponding analysis for a fee. Anyone interested in free, however, an overview of a variety of offerings with an online rate calculator.

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How do customers rate AXA?

If you want to know what experiences customers have made with AXA car insurance , you can take a look at another DISQ investigation. In 2013, an online survey of over 3,000 people surveyed their experience of service, value for money, contract performance and claims settlement by their car insurer. Although AXA achieved a good fourth place here. However, it was already evident in the individual evaluation that many customers were not satisfied with the service provided by AXA.

AXA car insurance: test shows customer dissatisfaction

In the current study from 2014 on the experience with motor insurance for insured persons, AXA falls to 15th place. However, this does not necessarily mean that experience with AXA car insurance is consistently poor. After all, the DISQ test is a survey of a relatively small group of insured persons. Already 100 AXA customers are enough to ensure that the provider is considered in the motor insurance test. With nearly 2.5 million motor vehicle liability insurance contracts signed (2013 AXA Annual Report), this is only a very small number. Interested persons should therefore not overvalue such results of the AXA motor insurance in the test.

Test results for 2014 are pending

It remains to be seen how AXA will beat this year’s car insurance tests. Focus Money had already searched for the fairest car insurers in 2014 together with Service Value GmbH. 25 providers were examined, but only the ratings of the very good and good companies were published. Unfortunately, the AXA is missing a corresponding assessment.

Here you can find tips and more information about car insurance.