Opinion of the Advocate General — ECLI:EU:C:2020:206
Date: 2020-03-12
Language of the case: German
Subject matter: Consumer protection;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Germany

Translation   C-639/18 — 1 
Case C-639/18 
Request for a preliminary ruling 
Date lodged: 
12 October 2018 
Referring court: 
Landgericht Kiel (Regional Court, Kiel, Germany) 
Date of the decision to refer: 
7 September 2018 
Applicant: 
KH 
Defendant: 
Sparkasse Südholstein 
  
[...] 
Landgericht Kiel (Regional Court, Kiel, Germany) 
[...] 
Order 
In the case of 
KN 
- Applicant - 
[...] 
v 
Sparkasse Südholstein, [...] […anonymised…], [...] Neumünster 
- Defendant - 
EN 
REQUEST FOR A PRELIMINARY RULING OF 7 SEPTEMBER 2018 — CASE C-639/18 
 
2  
[...] 
concerning withdrawal from loan agreements 
the 12th Civil Chamber of Regional Court, Kiel [...] made the following order: 
I. The proceedings are stayed. 
II. The following questions are referred to the Court of Justice of the European 
Union for a preliminary ruling in relation to the interpretation of Article 2(a) 
of Directive 2002/65/EC of the European Parliament and of the Council of 
23 September 2002 concerning the distance marketing of consumer financial 
services and amending Council Directive 90/619/EEC and Directives 
97/7/EC and 98/27/EC (OJ 2002 L 271, p. 16): 
1. Within the meaning of Article 2(a) of Directive 2002/65/EC, is a 
contract concluded ‘under an organised distance sales or service-
provision scheme run by the supplier’, by means of which an existing 
loan agreement is amended solely with regard to the interest rate 
agreed [Or. 2] (follow-up interest agreement), if a branch bank 
concludes loan agreements for the purpose of financing an immovable 
property secured by mortgage only at its commercial premises, but in 
ongoing business dealings concludes contracts to amend loan 
agreements that have already been agreed in some cases also by 
making exclusive use of means of distance communication? 
2. Does a ‘contract concerning financial services’ within the meaning of 
Article 2(a) of Directive 2002/65/EC exist if an existing loan 
agreement is amended solely with regard to the agreed interest rate 
(follow-up interest agreement), without extending the term of the loan 
or altering the amount of the loan? 
I. 
1. The defendant is a regionally active branch bank. It concludes loan agreements for 
the purpose of financing an immovable property secured by mortgage only in its 
branches. In some individual cases, in ongoing contractual relationships, additions 
or amendments to such contracts are made by means of distance communication. 
It is undisputed that at the beginning of 2008 the defendant had already concluded 
contracts making exclusive use of means of distance communication in a number 
of cases rising into at least three figures. 
2. The case concerns three loan agreements which the applicant has concluded as a 
consumer: 
3. 1. On 1 July 1994 the applicant agreed with the legal predecessor of the 
defendant the granting of a loan for the purpose of financing an immovable 
property in the amount of DM 114 000, which was supposed to be repaid on 
KH 
 
3 
30 December 2017 (loan account No 53209110). Interest was to be paid on the 
loan at a rate of 6.95% p.a. At the earliest six weeks before 30 May 2004, each 
party was supposed to be able to request negotiations regarding an adjustment of 
the interest rate with effect from 1 June 2004. If no agreement is made regarding 
an adjustment, as from 1 June 2004 ‘variable terms’ as specified by the defendant 
in each case for loans of this kind were supposed to apply (variable interest rate). 
A loan secured by mortgage was agreed. 
4. On 25 May 2004, by way of an amendment agreement the parties agreed upon an 
interest rate of 5.03% p.a. as from 1 June 2004 for a period of ten years. 
5. In October 2010, the parties concluded a further follow-up interest agreement, 
making exclusive use of means of distance communication, under which 
agreement an interest rate of 4.01% was to be applied to the loan from 1 June 
2014 for the remaining contractual term. The new interest rate was intended to 
apply up to the end of the contract as already agreed. The applicant was not 
informed of his right of cancellation. 
6. Between [...] June 2014 and November 2017, the applicant paid EUR 8 180.76 to 
the defendant on this contract. [Or. 3] 
7. The applicant repaid the loan on 29 December 2017 by payment of 
EUR 58 287.27. 
8. 2. On 17 July 1994 the applicant agreed with the legal predecessor of the 
defendant the granting of a further loan for the purpose of financing an immovable 
property in the amount of DM 112 000 (loan account No 73237471). Interest was 
to be paid on the loan at a rate of 5.7% p.a. At the earliest six weeks before 
30 May 1999, each party was supposed to be able to request negotiations 
regarding an adjustment of the interest rate with effect from 1 June 1999. If no 
agreement is made regarding an adjustment, as from 1 June 1999 ‘variable terms’ 
as specified by the defendant in each case for loans of this kind were supposed to 
apply (variable interest rate). A loan secured by mortgage was agreed. 
9. In 1999, by way of an amendment agreement the parties agreed upon an interest 
rate of 4.89% p.a. with effect from 1 June 1999 for a period of ten years. 
10. On 15 April 2009, the parties, making exclusive use of means of distance 
communication, agreed an addition to the loan agreement. The parties agreed 
upon an interest rate of 5.16% p.a. as from 1 June 2009 for a period of ten years. 
The applicant was not informed of his right of cancellation. 
11. Between June 2009 and February 2018, the applicant paid a total of 
EUR 18 243.75 to the defendant on the contract. 
12. The applicant furthermore paid the defendant an account administration fee of 
EUR 12 on 30 November 2009. 
REQUEST FOR A PRELIMINARY RULING OF 7 SEPTEMBER 2018 — CASE C-639/18 
 
4  
13. 3. On 4 November 1999 the legal predecessor of the defendant granted the 
applicant a loan in the amount of DM 30 000 (loan account No 70905104). 
According to the contract, the loan was supposed to be used for an ‘equity 
holding’, but it was actually supposed to be used as a personal loan, as agreed. 
Interest was to be paid on the loan at a rate of 6.6% p.a. At the earliest six weeks 
before 30 November 2008, each party was supposed to be able to request 
negotiations regarding an adjustment of the interest rate with effect from 
1 December 2008. If no agreement is made regarding an adjustment, as from 
1 December 2008 ‘variable terms’ as specified by the defendant in each case for 
loans of this kind were supposed to apply (variable interest rate). A loan secured 
by mortgage was also agreed. 
14. At the end of 2008, the parties concluded a follow-up interest agreement, making 
exclusive use of means of distance communication, under which agreement an 
interest rate of 4.87% was to be applied to the loan from 1 December 2008 for ten 
years. The defendant did not inform the applicant of his right of cancellation. 
15. Between December 2008 and February 2018, the applicant paid a total of 
EUR 8 328.33 to the defendant on this contract. 
16. On 2 September 2015, the applicant withdrew from the three follow-up interest 
agreements concluded in 2008, 2009 and 2010, with the withdrawal being 
received by the defendant at the latest on 8 September 2015. The withdrawal was 
based on the grounds that distance selling had been involved. On 30 September 
2015, the defendant seriously and definitively refused a payment on account of the 
withdrawal. 
17. The applicant takes the view that the defendant had an organised distance sales 
scheme. The applicant had a right of withdrawal arising from Paragraph 495(1) of 
the Bürgerliches Gesetzbuch (German Civil Code; ‘the BGB’) old version and 
secondarily arising from the first sentence of Paragraph 312d(1) BGB old version. 
[Or. 4] 
18. By means of his action the applicant is in particular seeking the repayment of the 
interest and redemption payments made since the conclusion of the amendment 
agreements from which he had withdrawn, the account administration fee paid and 
compensation for the uses made thereof by the defendant. [...] 
19. The applicant requests the Court to: 
20. 1. order the defendant to pay to the applicant EUR 37 285.38 plus interest at 
the rate of five percentage points above the relevant base rate of interest on this 
amount since the commencement of proceedings; 
21. 2. 
KH 
 
5 
a) declare that in respect of the loan agreement existing between the parties in 
relation to DM 112 000 (account No 73237471) an agreement concerning a fixed 
interest rate no longer exists owing to the withdrawal of 2 September 2015; 
22. b) declare that in respect of the loan agreement existing between the parties in 
relation to DM 30 000 (account No 70905104) an agreement concerning a fixed 
interest rate no longer exists owing to the withdrawal of 2 September 2015; 
23. 3. 
a) declare that owing to the withdrawal of 2 September 2015 the applicant is no 
longer obliged to pay monthly instalments of EUR 173.75 to account 
No 73237471; 
24. b) declare that owing to the withdrawal of 2 September 2015 the applicant is 
no longer obliged to pay monthly instalments of EUR 75.03 to account 
No 70905104; 
25. 4. declare that the defendant is obliged to pay back to the applicant all sums 
of money, plus interest in the amount of five percentage points [in the alternative: 
2.5 percentage points] above the relevant base rate of interest, from the time of 
receipt into the loan account which have flowed into the loan accounts stated 
under 2. and 3. between the day after the oral hearing and the time at which this 
judgment becomes final. 
26. The defendant requests the Court to: 
27. dismiss the action. 
28. The defendant takes the view that the applicant did not have a right of withdrawal. 
The applicant had declared a withdrawal only under distance selling law. Under 
consumer credit law, it was already not possible to withdraw from the original 
loan agreements due to the fact that they were secured by mortgage. In the case of 
adjustment of terms it was not possible to withdraw from a follow-up agreement 
that did not provide any further-reaching capital utilisation right. The follow-up 
interest agreements also did not involve a financial service within the meaning of 
the legal provisions on distance selling. The applicant moreover misunderstood 
that even in the event of effective withdrawal it would be possible only to reverse 
the amendment agreements and the loans [Or. 5] would be subject to a variable 
interest rate as agreed. 
29. Paragraph 312b(1) BGB in the version in force from 8 December 2004 to 
22 February 2011 [...] [amendments with citations] reads: 
30. (1) Distance contracts are contracts for the supply of goods or the rendering 
of services, including financial services, concluded between a commercial 
operator and a consumer exclusively by the use of means of distance 
communication, where the contract is concluded under an organised distance 
REQUEST FOR A PRELIMINARY RULING OF 7 SEPTEMBER 2018 — CASE C-639/18 
 
6  
sales or service-provision scheme. Financial services within the meaning of the 
first sentence are any service of a banking, credit, insurance, personal pension, 
investment or payment nature. 
31. Paragraph 312d(1) and (2) BGB in the version in force from 8 December 2004 to 
10 June 2010 [...] [amendments with citations] reads: 
32. (1) In the case of a distance contract the consumer has a right of withdrawal 
under Paragraph 355. Instead of the right of withdrawal, in the case of contracts 
for the supply of goods the consumer may be granted a right of return under 
Paragraph 356. 
33. (2) In derogation from the first sentence of Paragraph 355(2), the withdrawal 
period shall not commence before the duties to provide information in accordance 
with Paragraph 312c(2) have been fulfilled; in the case of the supply of goods not 
before the date on which they are received by the recipient; in the case of 
recurrent supplies of goods of the same kind not before the date on which the first 
instalment is received; and in the case of services not before the date on which the 
contract is concluded. 
34. Paragraph 312d(1) and (2) BGB in the version in force from 11 June 2010 to 
3 August 2011 [...] [amendments with citations] reads: 
35. (1) In the case of a distance contract the consumer has a right of withdrawal 
under Paragraph 355. Instead of the right of withdrawal, in the case of contracts 
for the supply of goods the consumer may be granted a right of return under 
Paragraph 356. 
36. (2) Notwithstanding the first sentence of Paragraph 355(3), the withdrawal 
period does not begin before the information requirements under Article 246, 
Paragraph 2 in conjunction with Paragraph 1(1) and (2) of the Einführungsgesetz 
zum Bürgerlichen Gesetzbuche (Introductory Law to the Civil Code; ‘the 
EGBGB’) have been fulfilled, in the case of supply of goods not before the receipt 
thereof by the recipient, in the case of recurrent supply of similar goods not before 
receipt of the first part delivery and in the case of services not before conclusion 
of the contract. [Or. 6] 
II. 
37. The question of whether the action with regard to the requests under 2 can be 
allowed depends on the interpretation of Article 2(a) of Directive 
2002/65/EC. Before judgment may be given, the proceedings must therefore be 
stayed and a preliminary ruling sought from the Court of Justice of the European 
Union pursuant to Article 267 TFEU. 
38. If the contracts withdrawn from which relate to the amendment of loan 
agreements were to be classified as distance contracts, it was still possible to 
declare the declared withdrawal in a legally effective manner in the absence of 
KH 
 
7 
instructions concerning the right of withdrawal as prescribed. Instead of the fixed 
interest rate subsequently agreed, the variable interest rate originally agreed 
between the parties would then be applicable. The action would have to be 
allowed insofar as it would be established that an agreement concerning a fixed 
interest rate no longer existed owing to the withdrawal of 2 September 2015 in 
respect of the loan agreements existing between the parties. 
39. A right of withdrawal on the part of the applicant therefore is ruled out because 
the amendment agreements would have to be regarded as successive operations or 
a series of separate operations of the same nature performed over time with 
respect to the corresponding loan agreements (Paragraph 312b(4) BGB old 
version in implementation of Article 1(2) of Directive 2002/65/EC). Recital 17 of 
Directive 2002/65/EC makes it clear that ‘successive operations’ means for 
example payment transactions or transactions covered by a framework agreement, 
but not contracts to modify a concluded contract [...] [national case-law]. Even if 
the follow-up interest agreement were to be categorised as an ‘operation of the 
same nature performed over time’ a right of withdrawal is not ruled out because 
the amendment agreements withdrawn from were not concluded within a year 
after an earlier ‘operation of the same nature’ (third sentence of Paragraph 312b(4) 
BGB old version in implementation of the second sentence of the second 
subparagraph of Article 1(2) of Directive 2002/65/EC). 
40. A right of withdrawal under the provisions on consumer credits (Paragraph 495(1) 
BGB old version in implementation of Directive 2008/48/EC) does not come into 
consideration because no loan is granted by means of the follow-up interest 
agreements withdrawn from, that is to say that no further-reaching capital 
utilisation right than that previously agreed had been conferred [...] [national case-
law]. 
41. 1. In this case it firstly comes down to the question of whether the contracts 
by means of which existing loan agreements have been amended exclusively with 
regard to the interest rate agreed (follow-up interest agreements) were concluded 
under an organised distance sales or service-provision scheme run by the supplier. 
An answer to the first question referred is required in order to be able to apply the 
implementing provisions of Paragraphs 312b(1) and 312d(1) and (2) BGB old 
version to the case. The concept of a ‘contract concluded ... under an organised 
distance sales or service-provision scheme’ (first sentence of Paragraph 312b(1) 
BGB old version) is to be interpreted in line with the directive, in accordance with 
the recognisable intent of the legislator. 
42. In case-law and jurisprudence, various views are advocated with regard to the 
interpretation of this concept, without the question being clarified thus far [...] 
[national literature]. The case-law has not hitherto assumed any organised distance 
selling scheme in the case of local savings banks [...] [national case-law]. The 
following is generally stated in the explanatory memorandum accompanying the 
draft legislation: ‘The existence of an organised sales scheme requires that the 
commercial operator, in terms of staffing and resources within its operations, has 
REQUEST FOR A PRELIMINARY RULING OF 7 SEPTEMBER 2018 — CASE C-639/18 
 
8  
created the requirements necessary in order to conduct business regularly by 
distance selling’ [...] These requirements are likely to be present in this case 
because the defendant is certainly equipped [Or. 7] in terms of both staffing and 
resources to regularly conclude amendment and supplementary agreements with 
existing customers by distance selling. According to the explanatory 
memorandum accompanying the draft legislation, however, transactions that are 
concluded with occasional and rather haphazard use of means of distance 
communication are intended to be excluded from the scope of the provisions [...]. 
Adduced as examples are cases in which a retailer accepts an offer of purchase by 
telephone as an exception and delivers the ordered product to the consumer [...]. 
In the present case it has not been established that the conclusion of the follow-up 
interest agreements was initiated by the applicant, nor does the defendant appear 
to be comparable to a retailer. Amendments to loan agreements are also not 
equivalent to a ‘chance purchase’, but may in fact have far-reaching impacts. 
43. On the other hand, if distance selling law were to be applied to the defendant this 
could lead to such amendment agreements being concluded only at its commercial 
premises. In that case the consumers would likewise have no right of withdrawal 
and no further advice can necessarily be expected; moreover, the simplification 
desired by consumers in terms of the conclusion of follow-up agreements through 
the use of means of distance communication would no longer be possible in that 
case. 
44. 2. In the present case it secondly comes down to the question of whether a 
follow-up interest agreement is to be regarded as a ‘contract concerning financial 
services’. An answer to the second question referred is required in order to be able 
to apply the implementing provisions of Paragraphs 312b(1) and 312d(1) and (2) 
BGB old version to this case. The concept of ‘contracts in relation to ... the 
provision of services, including financial services’ (first sentence of 
Paragraph 312b(1) BGB old version) is to be interpreted in line with the directive, 
in accordance with the recognisable intent of the legislator. 
45. The Oberlandesgericht Frankfurt (Higher Regional Court, Frankfurt, Germany) 
took the following view in this regard [...]: Simply amending the terms of a credit 
that had already been granted did not constitute a (new, independent) service 
provided by the bank. Instead, this was part of the original granting of credit. The 
assumption of a distance contract always presupposed the delivery of a product or 
the provision of a service by the commercial operator, such that it was not 
sufficient if, under the agreement reached only a consumer performed a service 
characteristic of the contract. 
46. However, the wording of Directive 2002/65/EC does not only cover contracts 
concluded in relation to financial services but also ‘contracts concerning financial 
services’. Contracts to amend loan terms are thus covered by that wording. The 
directive’s protective purpose might also be relevant, because a hasty adjustment 
to terms that is agreed to without any advice in person may, depending on the 
content of the agreement, take advantage of the consumer. Moreover, in 
KH 
 
9 
accordance with the aforementioned view, in that case no right of withdrawal 
would exist even if the amendment to the contract (in a manner that is possibly 
disadvantageous to the consumer) by distance selling was initiated by the supplier, 
which appears to be questionable. Gaps in protection could emerge even if a 
contract that may be but is not withdrawn from could be subsequently amended, to 
the disadvantage of the consumer, without the consumer having a new right of 
withdrawal with regard to the contract amendment. It should moreover be noted 
that a follow-up interest agreement in the case of real estate loans prevents the 
consumer from giving ordinary notice of termination of the loan for the duration 
of the agreed upon fixed interest rate (Paragraph 489(1) BGB). 
[...]