The Patent and Market Court of Appeal ruled on Tuesday that a credit provider's right to unilaterally increase the amount of a late fee violated section 3 of the Act on Contract Terms in Consumer Relations. The prohibition applies to contracts that were not individually negotiated and were entered into before March 1, 2025. The court did not, however, find that charging a late fee per se was unlawful under that section.
The case stems from a 2020 action by the Consumer Ombudsman against a credit provider whose standard contracts allowed it to charge a late fee in addition to default interest, with the fee amount adjustable at any time. The court declined to review the terms under the Consumer Credit Act, which for contracts after March 2025 forbids any compensation beyond default interest. Unlike the lower instance, the appeal court accepted that a late fee clause could be included in pre-2025 contracts, but the unilateral increase power was deemed unfair.
The judgment may be appealed. One member of the court dissented, though the reasoning was not detailed. The specific late fee amounts at issue were not disclosed, and it remains unclear how many consumers are affected or whether the credit provider will appeal.