Austrian OGH on Insufficient Transparency in Loan Agreements

Dec 5, 2025 Benn-Ibler Rechtsanwälte

During an appeal, the Austrian Supreme Court (Oberster Gerichtshof, or OGH) examined the validity of certain terms in loan agreements. The main question was whether a processing fee in the agreement could be enforced when consumers were not clearly informed about which services the fee covered or how it differed from other fees they were charged at the same time.

Accordingly, the central issue of the dispute was the matter of transparency as addressed in Section 6(3) of the Austrian Consumer Protection Act (Konsumentenschutzgesetz, hereinafter KSchG).

The case involved a EUR 405,000 loan obtained by a consumer in 2016. In addition to various individual charges—such as fees for property inspection and valuation, land registry searches, trustee processing, and court filing and registration—the bank levied a 3% processing fee. The borrower sought reimbursement of this processing fee, contending that it was disproportionate given its purpose of merely increasing the loan amount and that it had been established through non-transparent and potentially abusive terms.

The claim was dismissed by the lower courts.

The OGH’s decision was informed by case law from the European Court of Justice concerning transparency requirements. The ruling determined that credit clauses must allow consumers to fully comprehend the nature, operation, and economic impact of any associated fees. Specifically, borrowers should be able to assess whether any fees imposed are redundant or constitute double charges. Consequently, banks are required to explicitly disclose the specific services included in the processing fee.

In this instance, making such a distinction was not possible. Although the bank had clearly outlined the additional fees within the contract, it failed to identify which specific activities were included in the EUR 12,000 processing fee. As a result, the consumer was left uncertain whether services like property valuation, land registry checks, or trust settlements were covered by that fee or could still incur extra charges.

The absence of differentiation leads to a deficiency in transparency as stipulated in Section 6(3) of the KSchG. Consequently, the processing fee clause is rendered invalid without necessitating a further assessment of abuse pursuant to Section 879(3) of the Austrian General Civil Code (ABGB).

With respect to interest, the OGH affirmed that interest on repayment claims is classified as default interest and therefore subject to a three-year limitation period. Consequently, any claim for interest covering a period exceeding three years prior to the commencement of proceedings is to be deemed time-barred.

The court directed the bank to reimburse the processing fee amounting to more than EUR 12,000; however, the supplementary claim for interest was denied. Consequently, the appeal was largely successful.

OGH 2 Ob 92/25f (23 October 2025)