In 2012 a consumer concluded with a credit institution, the Kreissparkasse Saarlouis, a credit agreement secured by mortgages for a sum of €100 000, at an annual borrowing rate of 3.61% fixed until 30 November 2021.
The credit agreement provides that the borrower has a period of 14 days to withdraw, that period running from the date of conclusion of the agreement but not starting to run until the borrower has received all the mandatory information referred to in a certain provision of the German Civil Code. The agreement does not include that information, though the communication of that information to the consumer determines when the withdrawal period starts to run. The agreement merely refers to a provision of German law that itself refers to other provisions of German law.
In early 2016 the consumer informed the Kreissparkasse that he was withdrawing from the agreement. The Kreissparkasse considered that it had properly informed the consumer of his right to withdraw and that the period for doing so had already expired.
The Landgericht Saarbrücken (the Regional Court of Saarbrücken, Germany), before whom an action was brought by the consumer, is doubtful whether he was correctly informed of the period in which he could exercise his right to withdraw. That court therefore requested from the Court of Justice a preliminary ruling on the interpretation of the directive concerning consumer credit agreements.1
The Landgericht Saarbrücken appreciates that that directive provides that it does not apply to credit agreements secured by a mortgage, such as that in the main proceedings. However, since the German legislature decided that the rules laid down by the directive should also be applicable to such agreements, the Landgericht Saarbrücken considers that an answer from the Court is necessary for the resolution of the dispute. The Court finds that the reference is legitimate in order to ensure a uniform interpretation of the German legislation.
By today’s judgment, the Court holds that the directive, the objective of which is to ensure consumers a high level of protection, must be interpreted as meaning that credit agreements for consumers must include clear and concise information on how the period for withdrawal is to be calculated. The effectiveness of the right to withdraw 2 would otherwise be seriously undermined.
Further, the directive precludes a credit agreement referring, with respect to mandatory information the communication of which to the consumer determines when the withdrawal period begins to run, to a provision of national law that itself refers to other provisions of the law of the Member state concerned. Where such a series of references occurs, the consumer cannot determine, on the basis of the agreement, the extent of his or her contractual obligations, or check whether all the required information is included in the contract that he or she has entered into, or, a fortiori, determine whether the period open for withdrawal has started to run.
In this case, the Court holds that the reference in the agreement at issue to provisions of German law does not comply with the requirement that the consumer should be made aware, in a clear and concise manner, of the period within which the right to withdraw can be exercised and of the other conditions governing its exercise