In several recent decisions, the Supreme Court (OGH) has made clear requirements for loan processing fees for consumer credit agreements – but advisory fees must be clearly distinguished from them.
Loan processing fees are generally permissible for consumer loans, but have been considered inadmissible by the Supreme Court in the following cases, for example:
- Percentage processing fees – INEFFECTIVE – gross overrun of the processing costs incurred by the bank.
- EUR 20,850 loan processing fee on EUR 695,000 loan – INEFFECTIVE – processing fee grossly exceeds the actual cost of processing.
3 % processing fee (EUR 12,150) on EUR 405,000 loan – NON-transparent – lack of delimitation of services covered by the processing fee.
When consulting fees can nevertheless be permissible in our view, taking into account case law:
Loan processing fees as an ancillary service from the loan agreement are subject to strict review of the general terms and conditions by the courts. However, a consulting fee based on an independent consulting contract is not. The consulting fee as the main obligation to provide services under an independent consulting contract (individual needs analysis, product comparison, financial planning, risk assessment) is not subject to this control.
What should be considered?
- SEPARATE AGREEMENT: conclude a separate consulting contract with its own service description and fee.
- INDEPENDENCE: Do not link the conclusion of the loan agreement to an advisory fee.
- PERFORMANCE-RELATED AND TRANSPARENT: Provide for an appropriate relationship between consulting fees and consulting services.
- DEMONSTRABLE: Document actual consulting effort, without mixing with processing costs.