Order;Information — ECLI:EU:C:2026:277
Date: 2026-03-24
Language of the case: Bulgarian
Court formation: Seventh Chamber
Procedure: Reference for a preliminary ruling
Origin: Bulgaria

Summary C-426/23 – 1 
Case C-426/23 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
11 July 2023 
Referring court: 
Sofiyski rayonen sad (Bulgaria) 
Date of the decision to refer: 
11 July 2023 
Applicants: 
D. D. 
B. Zh. 
Defendant:  
‘Financial Bulgaria’ EOOD 
      
Subject matter of the main proceedings 
Two sets of proceedings in which the respective applicant claims that the contract 
which he concluded with the defendant company, under which the defendant 
company agreed to guarantee for pecuniary interest the applicant’s obligations 
towards another company arising from a credit agreement, is void on the ground 
that it was concluded in the exercise of an unfair term in the credit agreement 
concluded between the applicant and that other company 
Subject matter and legal basis of the request 
Request for a preliminary ruling under Article 267 TFEU concerning the 
interpretation of Directives 93/13, 2005/29, 2008/48 and 2009/138. The present 
request for a preliminary ruling raises the same questions as those referred to the 
Court in Case C-337/23. 
EN 
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Questions referred for a preliminary ruling 
1. Are Article 4(2) and Article 6(1) of Council Directive 93/13/EEC on unfair 
terms in consumer contracts (‘Directive 93/13/EEC’) to be interpreted as 
meaning that: 
where a credit agreement imposes an obligation on the consumer to 
conclude a contract of guarantee with a guarantor nominated by the creditor, 
the content of the contract of guarantee is not the ‘main subject matter’ of 
the contract with that third party but forms part of the content of the credit 
agreement? Is it relevant in that regard whether the creditor and the 
guarantor are connected persons? 
2. Is point 1(i) of the Annex to Directive 93/13/EEC to be interpreted as 
meaning that: 
where the consumer is required to provide a guarantor in connection with a 
credit agreement which has already been concluded – one of the options 
being for him or her to appoint a person nominated by the creditor – the 
content of the consumer’s obligation under the contract of guarantee 
concluded later on the day on which the credit agreement was concluded 
must be regarded as unclear, since it was not possible for the consumer 
himself or herself to select or propose the person to be nominated by the 
creditor as the future guarantor? 
3. If the answer to the preceding question is that the subject matter of the 
contract of guarantee is clear, is point 1(i), (j) and (m) of the Annex to 
Directive 93/13/EEC to be interpreted as meaning that: 
where the consumer has undertaken to provide a guarantor in connection 
with a credit agreement which has already been concluded – one of the 
options being for him or her to appoint a person nominated by the creditor – 
the content of the consumer’s obligation under the credit agreement must be 
regarded as unclear and may lead to the nullity of the credit agreement or 
particular terms thereof? 
4. Is Article 4(1) of Directive 93/13/EEC, read in conjunction with Article 8 of 
Directive 2005/29/EC concerning unfair commercial practices, to be 
interpreted as meaning that: 
where a person granting credit requires the consumer to conclude an 
agreement with a person nominated by the creditor to secure the creditor’s 
claim against the consumer, that always constitutes exploitation of the 
consumer’s disadvantageous position and is therefore an aggressive 
commercial practice? 
5. If Question 4 is answered in the negative: are Article 4(1) and Article 7 of 
Directive 93/13/EEC, read in conjunction with Article 8 of Directive 
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2005/29/EC concerning unfair commercial practices, to be interpreted as 
meaning that: 
in unilateral legal proceedings, such as the order for payment procedure, to 
which the consumer is not a party, the court may base doubts as to the 
fairness of a contractual term solely on its suspicion that the term was 
accepted by the consumer on the basis of an unfair commercial practice, or 
must the latter be established with certainty? 
6. Is Article 15(2) of Directive 2008/48/EC on credit agreements for consumers 
(‘Directive 2008/48/EC’) to be interpreted as meaning that: 
it applies in cases where the credit agreement is linked to an ancillary 
service, namely the provision of a guarantee by a third party in return for a 
fee, and allows the consumer not only to pursue his or her claims on grounds 
of wrongful conduct on the part of the guarantor, such as payment after the 
expiry of a statutory time limit, but also to rely on procedural objections 
which rule out the obligation to the guarantor? 
7. Does Article 15(2) of Directive 2008/48/EC, taken in conjunction with the 
principle of effectiveness, or – on the assumption that the credit agreement 
and the contract of guarantee constitute related transactions – do Articles 5 
and 7 of Directive 93/13/EEC, read in conjunction with point 1(b) and (c) of 
the Annex thereto, permit: 
national case-law according to which the guarantor of a contract linked to a 
consumer credit agreement who has received a fee from the consumer for 
the collateralisation of the credit agreement and who has paid the principal 
creditor on the basis of a contractual term, despite the expiry of the period 
laid down in Article 147 of the Zakon za zadalzheniata i dogovorite (Law on 
obligations and contracts), which, according to the relevant case-law, 
extinguishes the guarantee in its entirety, may nevertheless plead that he has 
succeeded to the rights of the original creditor and, citing contradictory case-
law on the application of the law, claim payment from the principal debtor? 
8. Is Article 3(g) of Directive 2008/48/EC, read in conjunction with Article 5 
of Directive 93/13/EEC, to be interpreted as meaning that: 
in the case of an obligation under a credit agreement to conclude a linked 
contract of guarantee, which has the effect of increasing the total amount of 
the credit liability, the annual percentage rate of charge (APR) for the credit 
must also be calculated on the basis of the increased instalments resulting 
from the fee paid to the guarantor? Is it relevant in that regard who selected 
the guarantor and whether he is a person connected with the principal 
creditor? 
9. Is Article 10(2)(g) of Directive 2008/48/EC to be interpreted as meaning 
that: 
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the incorrect indication of the APR in a credit agreement concluded between 
a seller or supplier and a consumer-borrower must be regarded as a failure to 
indicate the APR in the credit agreement and that the national court must 
apply the legal consequences laid down by national law for failure to 
indicate the APR in a consumer credit agreement? Is it to be assumed that 
those consequences must also apply to the guarantor who has paid in his 
relationship with the consumer? 
10. Is the second sentence of Article 23 of Directive 2008/48/EC to be 
interpreted as meaning that: 
the penalty for which the national legislature provides, namely the nullity of 
the consumer credit agreement, whereby only the principal amount granted 
is repayable, must be regarded as proportionate in cases where the consumer 
credit agreement does not contain a precise indication of the APR in that it 
does not indicate the cost of a commercial guarantor selected by the creditor, 
even though the APR is indicated in numerical form in the text of the credit 
agreement? 
11. Is Article 2(2) of Directive 2009/138/EC on the taking-up and pursuit of the 
business of Insurance and Reinsurance (Solvency II) (‘Directive 
2009/138/EC’), read in conjunction with point 14 of Part A of Annex 1 to 
that directive, to be interpreted as meaning that: 
the professional pursuit of a remunerated activity as guarantor, in the context 
of which the guaranteeing company pays, in all cases of default, the total 
amount of credit contracted by a consumer who is the principal debtor and 
the fee is paid with each instalment of credit, irrespective of the consumer’s 
default, constitutes an ‘insurance activity’ within the meaning of that 
directive? 
12. If Question 11 is answered in the affirmative: is Article 14(1) of Directive 
2009/138/EC to be interpreted as meaning that: 
a person pursuing the activity referred to in Question 11 is subject to an 
obligation to obtain authorisation from the national regulatory authorities 
responsible for granting authorisations to insurers? 
Provisions of European Union law relied on 
Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer 
contracts 
Directive 2005/29/EC of the European Parliament and of the Council of 11 May 
2005 concerning unfair business-to-consumer commercial practices in the internal 
market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 
98/27/EC and 2002/65/EC of the European Parliament and of the Council and 
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Regulation (EC) No 2006/2004 of the European Parliament and of the Council 
(the Unfair Commercial Practices Directive) 
Directive 2008/48/EC of the European Parliament and of the Council of 23 April 
2008 on credit agreements for consumers and repealing Council Directive 
87/102/EEC 
Directive 2009/138/EC of the European Parliament and of the Council of 
25 November 2009 on the taking-up and pursuit of the business of Insurance and 
Reinsurance (Solvency II) 
Provisions of national law and case-law relied on 
Grazhdanski protsesualen kodeks (Code of civil procedure), Articles 5, 6, 7, 410, 
411, 413, 414, 414а, 415 and 416 
Zakon za potrebitelskia kredit (Law on consumer credit), Articles 2, 9, 10, 10а, 
11, 14, 19, 20, 21, 22, 23, 24, 26, 28 and 33, and Paragraph 2 of the Dopalnitelni 
razporedbi (Additional provisions) 
Zakon za zashtita na potrebitelite (Law on consumer protection), Articles 143, 
144, 145, 146 and 147, and Paragraph 13а of the Dopalnitelni razporedbi 
(Additional provisions) 
Zakon za zadalzheniata i dogovorite (Law on obligations and contracts; ‘the 
ZZD’), Articles 22, 86, 138, 141, 142, 143, 146 and 147 
Postanovlenie No 426 ot 18 dekemvri 2014 g. za opredelyane razmera na 
zakonnata lihva po prosrocheni parichni zadalzhenia (Decree No 426 of 
18 December 2014 setting the amount of the statutory interest rate for monetary 
debts not paid on time) – single Article – and Paragraph 1 of the Dopalnitelni 
razporedbi (Additional provisions) 
Zakon za sadebnata vlast (Law on the judiciary), Article 130 
Kodeks za zastrahovaneto (Code of insurance law), Articles 3, 28 and 29 and 
Annex 1 
Interpretative Decision No 4/2013 of the Obshto sabranie na grazhdanskata i 
targovskata kolegii (General Assembly of Civil and Commercial Chambers; ‘the 
OSGTK’) of the Varhoven kasatsionen sad (Supreme Court of Cassation, 
Bulgaria; ‘the VKS’) of 18 June 2014 
Interpretative Decision No 5/2019 of the VKS OSGTK of 21 January 2022 
Order No 5389 of the Sofiyski gradski sad (Sofia City Court, Bulgaria) of 
1 March 2019 in civil appeal case No 2165/2019 
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Succinct presentation of the facts and procedure in the main proceedings 
1 The applicant in the first set of proceedings is D. D. – a Bulgarian national who 
received a loan from a non-bank financial institution. The defendant is Financial 
Bulgaria EOOD – a company registered in Bulgaria which is chiefly engaged in 
securing the debts of natural persons [in their capacity] as consumers. 
2 The applicant claims that, on 19 January 2021, he concluded a credit agreement 
with Easy Asset Management AD (a financial institution outside the banking 
sector), under which he was to obtain BGN 1 250. The contract provided for an 
APR of 41.34%. 
3 Article 4 of that contract stipulated that the applicant was to provide security in 
the form of two natural persons selected by him as guarantors or [in the form of] a 
bank guarantee. The guarantors had to have net salaries of at least BGN 1 000, be 
employed on open-ended contracts, and not have taken out or secured any other 
loans. 
4 It is not claimed that the credit agreement contains a term relating to the 
consequences of non-performance of that obligation by the consumer. 
5 On the day on which the credit was granted, 19 January 2021, the applicant also 
concluded a contract of guarantee with the defendant, Financial Bulgaria EOOD 
(a subsidiary of Easy Asset Management AD), whereby the defendant undertook 
to perform the debtor’s obligation towards the original creditor if the creditor 
required it to do so. For assuming that obligation, Financial Bulgaria EOOD was 
to receive remuneration of BGN 500, to be paid directly to the original creditor, 
Easy Asset Management AD, by way of a supplementary charge in the monthly 
instalments. 
6 The applicant challenged the credit agreement before the referring court on the 
ground that the fee paid for the guarantor’s service had not been included in and 
factored into the APR. He also challenged the contract of guarantee on the ground 
that the fee it provided for was excessively high. 
7 The defendant contends that the applicant concluded the contract of guarantee 
voluntarily and that the contract contains no unfair terms. 
8 In the second set of proceedings (in which the applicant is the Bulgarian national 
B. Zh.), the facts and the forms of order sought by the parties are almost identical 
to those in the first set of proceedings; the only differences are that the agreement 
and contract were concluded with the applicant on 17 January 2020, the amount 
drawn down is BGN 2 250, the APR is 49% and the guarantor’s fee is BGN 900. 
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Succinct presentation of the reasoning in the request for a preliminary ruling 
Connection to EU law and need for interpretation: the link between the credit 
agreement and the contract of guarantee – the first three questions referred 
9 First of all, the referring chamber wishes to clarify the extent to which the credit 
agreements concluded by the debtors are linked to the contracts of guarantee, so 
that it can assess the unfair nature of the terms they contain. In the present case, 
there is a suspicion that the contracts of guarantee are being concluded for the 
primary purpose of circumventing the restriction laid down by the Law on 
consumer credit, which provides for a maximum APR for consumer credit 
agreements. 
10 It is for the referring chamber to examine of its own motion whether the terms of 
both the initial credit agreement and the contract of guarantee are unfair. Under 
Bulgarian law, the contract of guarantee is classed as an agency contract within 
the meaning of Article 280 of the ZZD, as the future guarantor makes a 
commitment to the original creditor to fulfil the debtor’s obligation. That follows 
from the fact that, under Bulgarian law, the contract of guarantee is independent 
of the principal credit agreement and that the parties to the contract of guarantee 
are the creditor and the guarantor (Article 138(1) of the ZZD). The obligation to 
guarantee the specific credit agreement and the price for the provision of that 
financial service therefore constitute the main subject matter of that contract of 
guarantee, the unfair nature of which is not possible to assess under Article 4(2) of 
Directive 93/13/EEC. This interpretation is consistent with the rulings of the Court 
of Justice, for example in paragraph 62 of the judgment of 16 July 2020 in Joined 
Cases C-224/19 and C-259/19, Caixabank, and the case-law cited: since the 
contract in question is concluded between a consumer-debtor and a commercial 
guarantor, the parties are not the same as the parties to a credit agreement, and 
their obligations differ. If the provision of the guarantee and the price are not 
agreed, the contract cannot exist. 
11 However, the question arises whether, in a case such as the present one, the 
classification of the contract of guarantee as an independent transaction with 
different main subject matter from that of the credit agreement is capable of 
ensuring effective consumer protection within the meaning of the Member States’ 
obligation under Article 7(1) of Directive 93/13/EEC. In that regard, there is no 
doubt that the contract of guarantee was concluded between parties other than 
those who concluded the initial agreement and that it contains different rights and 
obligations. 
12 There are, however, many reasons to believe that both contracts actually govern a 
single legal relationship, which is intended to secure an increase in the consumer’s 
debt as the borrower, for under the terms of the principal credit agreement, 
consumers themselves cannot select the guarantor but are required to accept the 
guarantor designated by the creditor if they have not found one themselves. The 
guarantor, in turn, is directly connected with the creditor, being its subsidiary. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-426/23 
 
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Moreover, the concluded contracts of guarantee provided for fees representing a 
high percentage of the total payable amounts of the loans. Furthermore, the fee for 
providing the guarantee is paid on the same dates as those on which the monthly 
loan instalments fall due and, from the consumer’s perspective, is part of his or 
her obligation under the credit agreement. Finally, the price for providing the 
guarantee is not included in the APR of the principal credit agreement and 
considerably increases its cost in breach of national rules. 
13 On the other hand, there is also the question of the nature of the contract of 
guarantee, which, though concluded at the request of a consumer, is concluded 
with a person selected unilaterally by the original creditor. The limited choice 
available to consumers effectively leaves them in the dark, at the time when the 
credit agreement is concluded, about the identity of the guarantor to which they 
will be bound and the conditions under which that will be done. 
14 The question therefore arises whether, in the case of such a twofold contractual 
relationship (credit agreement and contract of guarantee), the content of the 
contract of guarantee may be regarded in toto as contrary to point 1(i) of the 
Annex to Directive 93/13/EEC. In those circumstances, but only if the two 
contracts are interpreted as a single contractual relationship, the referring chamber 
might consider that the contract of guarantee is void in its entirety, since the main 
subject matter of the contract for the provision of the guarantee is not determined 
by the consumer, who is nevertheless required to accept the guarantor selected by 
the original creditor. 
15 However, the uncertainty as to the identity of the guarantor could also be regarded 
as an ambiguity in the credit agreement which was initially concluded, since the 
absence of a guarantor for that agreement could lead to non-performance of the 
agreement if the term is valid. An answer is therefore needed to the question 
whether the inclusion in the credit agreement of an obligation to conclude a 
contract of guarantee with a person designated by the creditor may be regarded as 
an unfair term within the meaning of point 1(i), (j) and (m) of the Annex to 
Directive 93/13/EEC. 
The link between the practice of nomination of a guarantor by the original 
creditor and the unfairness of contractual terms – the fourth and fifth questions 
referred 
16 According to the case-law of the Court of Justice (paragraphs 43 to 44 of the 
judgment of 15 March 2012, Perenicovà and Perenic, C-453/10, and 
paragraphs 48 to 50 of the judgment of 19 September 2018, Bankia, C-109/17), 
whether a party has resorted to an unfair commercial practice within the meaning 
of Directive 2005/29/EC to include a term in a contract is one element in the 
assessment of unfairness within the meaning of Article 4 of Directive 93/13/EEC. 
17 In the view of the referring chamber, the amount of the debtors’ obligations in the 
pending cases depends on whether or not those debtors provide the creditor with a 
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guarantee. In this respect, it is necessary to assess whether the fact that the 
creditor’s selection of a guarantor binds the consumer may be interpreted as an 
unfair commercial practice within the meaning of Directive 2005/29/EC. In this 
context, the referring chamber needs an answer to the question whether the unfair 
nature of the commercial practice as aggressive within the meaning of Article 8 of 
Directive 2005/29/EC can be determined in the present case on the sole basis of 
the nature of the legal transaction between the parties in the form of a credit 
agreement and the consequences envisaged for the absence of a guarantee, or 
whether that assessment must also be made on the basis of additional factors. 
18 On the other hand, the referring chamber considers that, in the context of a 
unilateral procedure, which the order for payment procedure is, it would be 
prevented from applying the rules relating to the overall assessment of the 
existence of an unfair commercial practice, since consumers are not yet involved 
in the order for payment procedure. According to the guidance given by the Court 
of Justice in paragraph 38 of the judgment of 11 May 2020, Lintner, C-511/17, in 
unilateral proceedings such as the order for payment procedure the court may also 
find that a party to a contract is not entitled to protection if, though not having 
established with certainty that a particular term should be regarded as unfair 
within the meaning of Directive 93/13/EEC, it nevertheless has reasonable doubts 
in that regard. This obligation stems from the requirement laid down in Article 7 
of Directive 93/13/EEC to provide effective means to protect consumers from 
being bound by unfair terms. In the present case, however, the reasonable doubts 
of the court as to the fairness of a contractual term are prompted by other 
reasonable doubts, namely a suspicion that the term has become an integral part of 
the contract as a result of recourse to an aggressive commercial practice within the 
meaning of Article 8 of Directive 2005/29/EC. It must therefore be determined 
whether, in such an event, a possible doubt as to the fairness of the commercial 
practice may lead to the conclusion that there are also reasonable grounds to 
suspect unfairness of a term within the meaning of Article 4(1) of Directive 
93/13/EEC. 
Effective application of the time limit for releasing the guarantor from his 
obligations to the creditor and the consumer – the sixth and seventh questions 
referred 
19 A question also arises in the light of settled national case-law on the application of 
the time limit under Article 147 of the ZZD for releasing guarantors from their 
liability. That case-law leaves the consumer-borrower in the dark regarding the 
effects of the consumer credit agreement at the time of its conclusion if the 
agreement prescribes the mandatory purchase of a guarantee. 
20 Under Article 147 of the ZZD, the obligation of the guarantor to pay the principal 
creditor ceases if the latter does not assert his claim against the principal debtor 
within six months of the date on which the claim falls due. That provision is 
mandatory. According to a binding national interpretative decision, that is a cut-
off period, for if the creditor has not asserted its rights against the principal debtor, 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-426/23 
 
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the legal relationship between it and the guarantor is extinguished in full. 
Payments made by the guarantor or confirmation of his obligations to the principal 
debtor are of no consequence in terms of the effects of that time limit, since it is 
subject to review by the court, acting of its own motion. The prescribed time limit 
does not constitute a limitation period. 
21 At the same time, some judicial chambers consider that the conclusions relating to 
the complete termination of the guarantee may be applied to the creditor’s claims 
against the guarantor but not to the guarantor’s rights against the consumer-debtor. 
Contrary to the interpretative decision, they consider that the termination of the 
guarantee does not have absolute effect and that only the guarantor can rely on it. 
This position raises problems when it comes to applying the Consumer Credit 
Directive, especially Article 15(2) of Directive 2008/48/EC. The referring 
chamber doubts whether that provision can be applied in the present case, as the 
debtors in all of the proceedings, besides their respective consumer credit 
agreements, also concluded contracts for the provision of a guarantee for a fee, 
which, in the view of the referring court, constitutes a financial service to the 
consumer. 
22 For those reasons, the question arises as to whether Article 15(2) of Directive 
2008/48/EC may be applied in situations where the guarantor has not fulfilled his 
obligation to refuse to pay because of the expiry of the period for liability under 
national law by invoking the extinction of the guarantee pursuant to Article 147 of 
the ZZD. According to the definition in Article 3(n) of Directive 2008/48/EC, 
such application is possible if it is accepted that the two contracts form a whole 
and finance each other, since the consumer pays for the guarantee together with 
the instalments specified in the credit agreement. If the provision is applicable 
with regard to the guarantor too, there will also be a need to answer the question 
whether it applies not only to reciprocal claims which the consumer might assert 
against the service provider in the context of a contract for the provision of 
services but also to his or her procedural defences, such as the refusal to settle a 
claim for recourse made by a person whose obligation had already expired. 
23 It is also necessary to examine the compatibility with EU law of the national case-
law according to which the guarantor may rely on the expiry of his period of 
liability under Article 147 of the ZZD on the ground that the original creditor has 
not asserted his claim under the credit agreement against the consumer-debtor 
within six months of the final due date, but the consumer cannot rely on the expiry 
of that period against the guarantor who has paid. 
24 Even if Article 15(2) of Directive 2008/48/EC is not applicable in the present 
case, the question to be answered is whether such national case-law is not contrary 
to Article 7 of Directive 93/13/EEC, in so far as that case-law allows the 
commercial guarantor himself to determine the scope of his obligation in breach 
of point 1(b) and (c) of the Annex to Directive 93/13/EEC. If the guarantor chose 
to object to the original creditor that he was being asked to pay after the expiry of 
the time limit laid down in Article 147 of the ZZD, the borrower-debtor would not 
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be liable to the guarantor for the monthly loan instalments. However, if the 
guarantor does not make this objection and pays, even though, under a binding 
interpretative decision relating to the order for payment procedure, the guarantor 
is under no such obligation, the consumer, as the principal debtor, would remain 
liable to the guarantor, since, according to the case-law set out above, he could not 
rely on the guarantor’s period of liability having expired. In at least one of the 
proceedings, this effect results from an explicit contractual term based on a 
contradictory interpretation by the national courts of the rules relating to the 
enforceability of that time limit, which should be based on mandatory statutory 
rules, namely those in Article 147 of the ZZD, governing the content of the 
contract of guarantee, but the consumer is being denied the protection of those 
rules. The contradictory national case-law therefore allows the guarantor to 
formulate the terms of the contract of guarantee, thereby depriving consumer 
protection under national law of its practical effectiveness. 
25 Accordingly, an answer is needed to the question whether the principle of 
effective consumer protection against unfair terms in the contract of guarantee, 
which govern how a seller or supplier who has undertaken to provide a guarantee 
must deal, after the expiry of the guarantor’s period of liability, with an order for 
payment addressed to him by the original creditor, precludes the application of 
national case-law according to which only the guarantor himself may rely on the 
expiry of his period of liability. 
26 The question must also be answered, in the light of Article 5 of Directive 
93/13/EEC, whether that provision allows contradictory national case-law on a 
particular question of national law to be used to interpret contractual terms 
unclearly to the detriment of consumers, as is happening in the present case. 
Impact of payment of the guarantee on the determination of the APR in the 
credit agreement 
27 The next three questions are identical to those referred to the Court of Justice in 
the pending Case C-714/22 Profi Credit Bulgaria. They concern the creditor’s 
obligation, in the context of a consumer credit agreement, to state clearly the APR 
in the text of the credit agreement so as not to mislead the consumer. Referring to 
the full grounds of that request for a preliminary ruling, the referring chamber 
expresses reservations as to whether Directive 2008/48/EC does not require, in 
addition to the annual percentage rate of charge in the text of the credit agreement, 
the indication of an APR calculated correctly in accordance with the method laid 
down by that directive. In the present case, since the costs for contracts of 
guarantee are not a component part of credit agreements, they are not taken into 
account in the determination of the APR for credit agreements. The referring 
chamber is unsure whether the cost of providing the guarantee should not be part 
of the APR, particularly in cases where the guarantor who agrees to secure the 
consumer’s obligations is selected by the original creditor but remunerated by the 
consumer. The definition in Article 3(g) of Directive 2008/48/EC stipulates that 
costs in respect of ancillary services must also be included in the APR if the use of 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-426/23 
 
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those services is a condition for the credit being granted at all or being granted 
under the terms and conditions laid down in the credit agreement. 
28 In order to determine whether the fee for the guarantor under a linked contract 
with the debtor must be included in the APR of the credit agreement, the question 
should also be answered whether and under what conditions that cost may be 
regarded as part of the APR if the debtor had the option to propose a guarantor 
himself in the short term. For this reason, the voluntary nature of the choice 
should also be taken into account, particularly as regards the determination of the 
guarantor, which ultimately depends on the will of the original creditor, the 
conditions, if any, for the creditor’s acceptance of a different guarantor, and the 
period available to the debtor to find such a guarantor. 
29 Furthermore, it is necessary to consider again whether the incorrect indication of 
the APR in a credit agreement must be regarded as failure to indicate the APR, 
since an incorrect indication defeats the purpose of the obligation to provide that 
information, namely to enable the consumer to compare offers in the credit market 
effectively. Following on from that question, the question also arises whether 
equating the indication of an incorrect APR with failure to indicate such a rate 
would not also lead, in more general terms, to a disproportionate penalty under 
national law for miscalculation. 
The nature of the contract for provision of the guarantee and its classification 
as an insurance transaction 
30 The referring chamber also has doubts as to the correct legal classification, in the 
light of EU law, of transactions whereby consumers agree that a particular person 
will guarantee their debts to another creditor for a fee where such transactions are 
conducted continuously on a professional basis. Chambers of the Sofia City Court 
and the Supreme Court of Cassation implicitly assume that such cases are ordinary 
guarantee transactions which are not subject to licensing regulations and could be 
conducted by anyone. 
31 In such transactions, however, a person undertakes, in the event of delay, to 
assume the liability of the consumer-debtor for the non-performance of his or her 
specific obligation to the creditor, the debtor paying a fee for that service. The 
main features of that obligation are similar to those of a credit insurance contract, 
namely the assumption of liability, for a consideration, if a future and uncertain 
adverse event (non-performance of a contract) occurs. For that reason, the 
referring chamber needs an interpretation to determine whether contracts such as 
those concluded with the debtors (on the provision of a guarantee to their creditors 
for a fee) can be classed as insurance contracts. The relevant Directive 
2009/138/EC does not define the content of insurance contracts, but such a 
definition can be found in the case-law of the Court of Justice, namely the 
judgment of 23 April 2015, Van Hove, C-96/14, paragraph 34: under the insurance 
contract, the insurer is required, in return for prior payment of a premium, to 
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indemnify the insured against the damage resulting from the materialisation of any 
insured risk indicated in the contract. 
32 The cases pending before the referring chamber relate to such fees and to an 
adverse event for the consumer-debtor in the form of default of payment, but it 
seems that no risk is specified which is normally classed as an insurance risk. In 
fact, the guarantor secures any non-payment on the part of the consumer, for 
whatever reason, including a deliberate refusal to repay the loan. That 
distinguishes the said contract to some extent from an insurance contract. 
33 On the other hand, a contract of guarantee with a professional guarantor reduces to 
a minimum the risks for the original debtor in the case of an adverse event in the 
form of non-repayment of the loan, and the contract is remunerative in nature, 
which makes it comparable with insurance. In the present case, consideration may 
be given to the question whether, in such a situation, the consumer, who is the 
principal debtor, is not acting as an insurer in relation to the original creditor, for 
whom he provides security against loss by remunerating the guarantor. For that 
reason, it should be ascertained whether such a contract may fall within the scope 
of the term ‘insurance contract’ within the meaning of Directive 2009/138/EC and 
whether, consequently, the recipient of a premium under such a contract is not 
subject to an authorisation requirement under Article 14 of that directive.