Consumer Protection: EU Court Judgment in Case C-555/21 UniCredit Bank Austria

Thursday 9th February 2023

Judgment in Case C-555/21 UniCredit Bank Austria

(Consumer Protection)

In its credit agreements secured by a mortgage directed at consumers, UniCredit Bank Austria AG (‘UniCredit’) uses standard terms governing the right to repay the loan early, with a reduction in the interest payable and the costs that are dependent on the duration of the agreement.

The agreements include the following standard term: ‘It is pointed out that the processing costs that are not dependent on the duration of the agreement will not be reimbursed (even on a pro-rata basis)’.

The Verein für Konsumenteninformation (‘VKI’) is a consumer protection association which brought an action against UniCredit in the Handelsgericht Wien (Commercial Court, Vienna, Austria), seeking an order for it to cease using the above term.

The court of first instance dismissed the action. However, the Oberlandesgericht Wien (Higher Regional Court, Vienna, Austria) upheld the appeal lodged by VKI and granted the forms of order sought in the application.

The Oberster Gerichtshof (Supreme Court, Austria) is asked to rule on the appeal lodged against the decision of the Oberlandesgericht Wien (Higher Regional Court, Vienna) by Unicredit, by which UniCredit seeks to have the judgment at first instance reinstated. Before doing so, it has referred the following question to the Court for a preliminary ruling:

‘Is Article 25(1) of Directive [2014/17] to be interpreted as precluding national legislation that provides for the sum of interest to be paid by the borrower and the costs that are dependent on the duration of the agreement to be proportionally reduced in the event that the borrower exercises the right to repay the amount of credit, either fully or partially, prior to the expiry of the agreed term, with no corresponding rule for costs that are not dependent on the duration of the agreement?’

Background Documents C-555/21