Entitlement to reimbursement of unlawful bank fees – limitation periods and legal framework
With its judgment of May 21, 2024 (Ref.: XI ZR 45/24), the Federal Court of Justice (BGH) has provided crucial clarity as to the period within which consumers, as well as commercial clients, can reclaim bank charges paid in excess. The ruling applies to situations where banks have levied charges that were not compliant with applicable law or contractual agreements.
Key findings of the BGH ruling
The BGH clarifies in its current decision that claims for repayment of unlawfully charged bank fees are subject to the regular civil law limitation periods. This means that, as a rule, such claims can no longer be enforced after three years from the end of the year in which the claim arose and the customer became aware of it or should have become aware of it without gross negligence. A lengthy reclaim period, for example for fees paid many years ago, is therefore excluded.
Background to the legal situation regarding bank charges
Development of case law on bank charges
Even in the past, the Federal Court of Justice classified several fee clauses of credit institutions as invalid, particularly when these did not provide any specific consideration for the customer or when, in the court’s opinion, the services provided by the bank could not be charged separately. This applies, for example, to fees for processing loan agreements or charges for maintaining payment accounts that exceed the contractually permissible amount.
Limitation period for repayment claims
According to § 195 BGB, the regular limitation period for such claims is three years. The period begins at the end of the year in which the claim arose and the claimant became aware of it or should have become aware of it without gross negligence (§ 199 para. 1 BGB). In its ruling, the BGH expressly confirmed that there is no extension of the limitation period for claims relating to unlawfully charged fees, even if ongoing business relationships exist.
Implications for consumers and businesses
Significance for bank customers
The current judgment has far-reaching practical significance: Those affected who discover that they have paid unjustified charges should immediately review when they became aware of these charges in order to avoid statute of limitations. For claims where the underlying payment was made more than three years ago and knowledge already existed, enforcement of the claim is generally no longer possible.
Impact on banks and payment obligations
On the part of credit institutions, there is now increased clarity regarding the maximum period within which their customers can make recourse claims. This necessitates that both banks and customers adapt business models and contract structures to legal requirements and regularly review existing agreements regarding charges.
Legal assessment and further developments
Legal situation in light of consumer protection and freedom of contract
The judgment provides further clarification with regard to balancing consumer protection and legal certainty. While customers should, in principle, be protected from excessive or unwarranted fee demands, banks must in turn be able to rely on the stability of their contractual relationships. The BGH jurisprudence makes it clear that these interests are to be reconciled through the strict application of the limitation provisions.
Risks associated with the accrual of the statute of limitations
It becomes clear that, in individual cases, it is essential to carefully review exactly when a claim for repayment arose and the extent of the claimant’s knowledge, since this will determine the starting point and expiry of the limitation period.
Conclusion and outlook
The BGH judgment provides market participants in the banking sector with greater legal certainty in dealing with claims for the reimbursement of unlawful charges and underscores the importance of regularly reviewing business relationships and payment obligations.
If you have any questions about the specific interpretation of the decision or the effectiveness of contractual fee clauses under current legal provisions, the lawyers at MTR Legal – a full-service commercial law firm active nationwide and worldwide – will be happy to provide qualified legal assessment.
