Banks defended their practices as necessary for maintaining financial sustainability during the negative interest period, although most have since stopped imposing such charges.
Consumer protection organizations have long argued that these fees are inadmissible, seeking both cessation of these practices and reimbursement of the fees charged.
While the BGH ruled against negative interest on savings and overnight deposit accounts, it found that negative interest rates on current accounts could be permissible if the contractual terms are transparent.
The court noted that customers were often unclear about when negative interest rates would apply to their current accounts, leading to the invalidation of these rates as well.
The BGH is currently reviewing multiple appeals from consumer protection agencies against various lower court decisions regarding these banking practices.
The Federal Court of Germany (BGH) has declared negative interest rates on savings accounts and overnight deposits, which several banks imposed between 2020 and 2022, as invalid.
Presiding judge Jürgen Ellenberger emphasized that negative interest rates unjustly disadvantage consumers, contradicting the fundamental purpose of banking contracts.
The outcome of the BGH's ruling could potentially allow affected customers to reclaim previously charged negative interest fees and establish clearer regulations for future low-interest periods.
The Federal Association of Consumer Centers aims to prevent the reintroduction of negative interest rates in future low-interest phases through their ongoing legal efforts.
The BGH found that the clauses used by various banks regarding fees for deposits were ineffective, highlighting the need for transparency in banking contracts.
This ruling stems from a broader context where, starting in June 2014, banks in the Eurozone were required to pay negative interest to the European Central Bank (ECB), which peaked at 0.5%, leading banks to transfer these costs to customers.
The ECB abolished negative interest rates in July 2022, prompting many banks to relax their fee structures, yet the legality of previously charged fees remains a contentious issue.
