Judgment;Summary — ECLI:EU:C:2024:263
Date: 2024-03-21
Language of the case: Bulgarian
Court formation: Ninth Chamber
Subject matter: Consumer protection;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Bulgaria

Summary C-714/22 – 1 
Case C-714/22 
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: 
22 November 2022 
Referring court: 
Sofiyski rayonen sad (Bulgaria) 
Date of the decision to refer: 
21 November 2022 
Applicant: 
S.R.G. 
Defendant: 
Profi Credit Bulgaria EOOD 
  
Subject matter of the main proceedings 
The proceedings are governed by the first paragraph of Article 267 TFEU 
Subject matter and legal basis of the request 
Dispute concerning the validity of a consumer credit agreement under which 
payment for a package of non-compulsory ancillary services was agreed. The 
following questions arise. Are those services activities involving the drawdown 
and servicing of credit, given that they are not included in the annual percentage 
rate of charge on the credit? Are those additional services therefore such as to 
constitute unfair terms within the meaning of Directive 93/13 and are they to be 
regarded as part of the ‘total cost of the credit’ used to determine the annual 
percentage rate of charge in accordance with Directive 2008/48? In the light of the 
previous case-law of the Court of Justice (judgment in Joined Cases C-24/19 and 
C-259/19), how are the costs of the proceedings to be apportioned where unfair 
terms are found to be present in a consumer agreement? 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-714/22 
 
2  
Questions referred for a preliminary ruling 
1. Is Article 3(g) of Directive 2008/48/EC to be interpreted as meaning that 
costs in respect of ancillary services agreed in connection with a consumer credit 
agreement, such as fees for the possibility of deferring and reducing instalments, 
constitute part of the annual percentage rate of charge for the credit? 
2. Is Article 10(2)(g) of Directive 2008/48/EC to be interpreted as meaning that 
an incorrect indication of the annual percentage rate of charge in a credit 
agreement between a trader and a consumer borrower must be regarded as a 
failure to indicate the annual percentage rate of charge in the credit agreement and 
the national court must apply the consequences provided for in national law for 
failure to indicate the annual percentage rate of charge in a consumer agreement? 
3. Is Article [23] of Directive 2008/48/EC to be interpreted as meaning that a 
penalty provided for in national law, in the form of the nullity of the consumer 
credit agreement, whereby only the principal amount granted is to be repaid, is 
proportionate where the annual percentage rate of charge is not accurately 
indicated in the consumer credit agreement? 
4. Is Article 4(1) and (2) of Directive 93/13/EEC to be interpreted as meaning 
that a fee for a package of ancillary services provided for in a supplementary 
agreement to a consumer credit agreement, which has been concluded separately 
and in addition to the main agreement, must be regarded as part of the main 
subject matter of the agreement and cannot therefore be the subject matter of the 
assessment of unfairness? 
5. Is Article 3(1) of Directive 93/13/EEC read in conjunction with point 1(o) of 
the annex to that directive to be interpreted as meaning that a term in an 
agreement on ancillary services relating to consumer credit is unfair if it grants the 
consumer the abstract possibility of deferring and rescheduling payments, in 
respect of which that consumer owes fees even if he or she does not make use of 
it? 
6. Are Articles 6(1) and 7(1) of Directive 93/13 and the principle of 
effectiveness to be interpreted as meaning that they preclude a legal provision 
whereby the consumer may be made to bear part of the costs of the proceedings in 
the following cases: (1) where a claim for a declaration that sums are not owed by 
reason of the established unfairness of a term is upheld in part […]; (2) where it is 
practically impossible or excessively difficult for the consumer, in the exercise of 
his or her rights, to specify the amount of the claim; (3) in all cases where an 
unfair term is present, including in cases where the presence of the unfair term 
does not directly affect, either in whole or in part, the amount of the creditor’s 
claim, or where the term has no direct connection with the subject matter of the 
proceedings? 
PROFI CREDIT BULGARIA  
 
3 
Provisions of European Union law and case-law relied on 
Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer 
contracts, in particular Articles 3(1), 4(2), 6(1) and 7(1) thereof 
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, in particular Article 3(g), Article 10(2)(g) and Article 23 thereof 
Judgment of 20 September 2018, EOS KSI Slovensko (C-448/17, EU:C:2018:745) 
Judgment of 16 July 2020, Caixabank and Banco Bilbao Vizcaya Argentaria 
(Joined Cases С-224/19 and С-259/19, EU:C:2020:578, in particular point 5 of the 
operative part) 
Provisions of national law relied on 
Zakon za zadalzheniata i dogovorite (Law on Obligations and Contracts), in 
particular Article 26 thereof 
Zakon za potrebitelskia kredit (Law on Consumer Credit; ‘the ZPK’), in particular 
Articles 10a, 11, 19, 21 to 24 and 33 thereof, as well as Paragraph 1 of the 
Dopalnitelni razporedbi (Additional Provisions) to that Law 
Grazhdanski protsesualen kodeks (Code of Civil Procedure), in particular 
Article 7(3) and Article 78 thereof 
Succinct presentation of the facts and procedure in the main proceedings 
1 On 10 October 2019, the applicant and the defendant concluded a consumer credit 
agreement with the following features: principal amount of 5 000 Leva (BGN), 
term of 36 months, annual interest rate of 41.00%, annual percentage rate of 
charge of 49.02%, giving a total amount for the credit of BGN 8 765.02. In 
addition to the total amount owed under the credit, the consumer credit agreement 
comprises remuneration for the following non-compulsory ancillary services: (a) 
grant of the right to priority consideration and disbursement of the consumer 
credit (‘Fast’ service), in the amount of BGN 1 250; and (b) grant of the right to 
reschedule the repayment of the consumer credit (‘Flexi’ service), in the amount 
of BGN 2 500. Those fees are included in the repayment schedule as part of the 
agreement, bringing the total liability for the credit to an amount of 
BGN 12 515.02, repayable over 36 monthly instalments of BGN 347.64 each. It is 
common ground between the parties that the defendant has in fact provided 
BGN 5 000 to the applicant. 
2 The credit agreement states that the customer expressly made known at the outset 
that it was her wish to acquire the ancillary services, the conditions for using such 
services being described in detail in the defendant’s general terms and conditions. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-714/22 
 
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According to those, the ‘Fast’ ancillary service gives customers who have 
purchased it the right to priority consideration of their credit application. 
Following a decision to approve the credit, the amount granted is transferred to the 
customer within 24 hours of signature of the required documents. In accordance 
with the general terms and conditions, the ‘Flexi’ ancillary service gives 
customers who have purchased it the right to reschedule their repayments, subject 
to the relevant specific conditions. Customers may ask to defer or reduce a certain 
number of repayment instalments if detailed reasons for doing so (incapacity to 
work, loss of employment, loss of or damage to property as a result of a disaster, 
etc.) are provided. 
3 As regards the substance of the case, it is common ground between the parties that 
the consumer voluntarily chose to purchase the abovementioned non-compulsory 
ancillary services at the time when the credit agreement was concluded. No 
objection has been raised to the effect that the applicant was misled with respect to 
the nature of the agreement concluded by her. It has not been alleged in the 
proceedings that the defendant would have refused to grant credit if those 
ancillary services had not been paid for. 
4 In accordance with the provisions of the Bulgarian ZPK that are applicable to this 
case, the creditor may not require the payment of fees or commissions for 
activities in connection with the drawdown and servicing of a credit 
(Article 10a(2)). The annual percentage rate of charge for a credit is defined as the 
current or future total cost of the credit to the consumer and must not exceed a 
certain upper limit (Article 19(1) and (4)). In that connection, the amount of the 
annual percentage rate of charge and the total amount payable by the consumer, 
calculated at the time when the agreement is concluded, are both mandatory 
features of a consumer credit agreement (Article 11(1)(10)). At the same time, any 
term in a consumer credit agreement which has the aim or effect of circumventing 
the requirements of the ZPK is null and void (Article 21); if the requirements 
governing the specification of the annual percentage rate of charge are not 
fulfilled or the upper limit applicable to that rate is exceeded, the consumer credit 
agreement is invalid (Article 22). If the consumer credit agreement is declared 
invalid, the consumer is to repay only the net amount of the credit and owes no 
interest or other costs connected with the credit (Article 23). 
5 Before the referring court, the applicant brought an action for a negative 
declaration. She seeks a declaration that she does not owe the defendant an 
amount totalling BGN 7 515.02, comprising: (1) BGN 3 765.02 by way of 
contractual interest, made up of the annual interest rate and the annual percentage 
rate of charge for the entire term of the consumer credit agreement; (2) 
BGN 1 250 by way of remuneration for the ‘Fast’ ancillary service; and (3) 
BGN 2 500 by way of remuneration for the ‘Flexi’ ancillary service. 
PROFI CREDIT BULGARIA  
 
5 
The essential arguments of the parties in the main proceedings 
6 S.R.G. submits that the terms in the consumer credit agreement which lay down 
an obligation to pay the annual interest rate, the annual percentage rate of charge 
and remuneration for the ancillary services are null and void on account of being 
contrary to accepted principles of morality. She further disputes the obligation to 
pay remuneration for the ancillary services because, in her opinion, they constitute 
routine credit servicing activities (involving the examination of applications for 
the grant and disbursement of consumer credit). S.R.G. states that the reason she 
does not owe the abovementioned remuneration on the ground of breach of 
accepted principles of morality is that the remuneration for the two ancillary 
services amounts in total to BGN 3 750, which is more than half of the amount 
loaned. The remuneration at issue does not relate to services which lie outside the 
creditor’s principal claim, but constitute fees for drawing down the credit or for 
activities in connection with servicing of the credit. That, therefore, is an 
infringement of the express prohibition precluding creditors from demanding fees 
and remuneration for activities connected with the drawdown and servicing of 
credit. The applicant further argues that the ancillary services form part of the 
contractual remuneration and must as such be included in the annual percentage 
rate of charge. Since the remuneration for those ancillary services represents a 
cost to the consumer and is therefore a hidden cost of the credit, it must be 
included in the determination of the annual percentage rate of charge. If, however, 
the costs in question were added to the annual percentage rate of charge, the latter 
would exceed the restrictions laid down by the ZKP with respect to the upper limit 
applicable to that rate, thus rendering the consumer credit agreement invalid. 
7 The defendant contends that, in her credit application, the applicant decided 
herself to purchase the ancillary services connected with the agreement. She had 
the necessary additional pre-contractual information concerning the services 
available under the agreement. The defendant submits that the annual interest rate 
is fixed, and that its general terms and conditions, which form part of the 
consumer credit agreement, specify what the contractual remuneration consists of, 
what conditions apply for the application of the interest rate and how the annual 
percentage rate of charge is calculated. What is more, details of the repayment 
instalments due over the full term of the agreement are set out in the repayment 
schedule. The general terms and conditions provide for a right of withdrawal for 
the consumer. The defendant takes issue with the assertion that the terms for 
purchasing the ancillary services are contrary to the accepted principles of 
morality, since those additional options are chosen by the applicant and are not a 
mandatory condition for the conclusion of the credit agreement. It therefore 
considers the applicant’s assertion that the agreement contains unfair terms to be 
unfounded. The defendant submits that the applicant has availed herself of the 
services under the ancillary agreement, namely, priority consideration and 
disbursement of consumer credit and deferral of contractually agreed repayment 
instalments. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-714/22 
 
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Succinct presentation of the reasoning in the request for a preliminary ruling 
8 In the view of the referring court, the subject matter of the proceedings relates 
primarily to the question of the validity of the credit agreement as a whole and the 
validity of the terms for purchasing the ancillary services in particular. Under 
Bulgarian law, the court called upon to adjudicate on the matter has an obligation 
to take into account of its own motion unfair terms in a consumer credit agreement 
such as that at issue here. 
9 In that context, the first question with which the referring court is faced is how the 
annual percentage rate of charge is determined in the case of a consumer credit 
agreement. Under national law, a consumer credit agreement in respect of which 
the legal requirements governing the specification of an annual percentage rate of 
charge are not fulfilled must be declared invalid. Under such an agreement, the 
consumer is liable only for repayment of the amount received, without interest or 
costs. The referring court draws a similar inference from the judgment [of the 
Court of Justice] in EOS KSI Slovensko (С-448/17), according to which the 
requirement laid down in Article 4(2) of Directive 93/13/EEC is not fulfilled 
where the term concerning the amount of the annual percentage rate of interest is 
not worded clearly. Consequently, the national court does not need to apply such 
terms. In the view of the referring court, it must nonetheless be examined whether 
the penalty provided for in national law, namely a declaration as to the invalidity 
of a consumer credit agreement which does not meet the mandatory requirements 
relating to the specification of the annual percentage rate of interest, is adequate or 
proportionate for the purposes of Article 23 of Directive 2008/48/EC. That 
question must be examined in the light of the applicant’s submission that the 
creditor deliberately did not include in the agreement the remuneration for the 
ancillary services, which, from the point of view of their content, are not ancillary 
services at all but relate to the drawdown and servicing of the credit, in the 
calculation of the annual percentage rate of charge. In the opinion of the referring 
court, the question that is to be answered is whether the incorrect specification of 
the amount of the annual percentage rate of charge in respect of a consumer credit 
agreement is to be treated in the same way as the failure to specify that rate. That 
calls for an answer to the further question as to whether the agreed remuneration 
for ‘ancillary services’ (which, at the time when the agreement was concluded, 
were contained in the original repayment schedule, and relate entirely to the 
manner of repayment of the credit and not to the receipt of other goods or 
interests) constitutes a cost which must be included in the annual percentage rate 
of charge, in accordance with Article 3(g) of Directive 2008/48. That necessitates 
an interpretation of whether, in the present case, the payment of such 
remuneration constitutes the ‘main subject matter’ of an agreement connected 
with the credit agreement or an additional condition of, and, accordingly, an 
additional cost connected with, the credit agreement. 
10 Lastly, the referring court would like to recall point 5 of the operative part of the 
judgment [of the Court of Justice] of 16 July 2020, Caixabank and Banco Bilbao 
Vizcaya Argentaria (Joined Cases С-224/19 and С-259/19), which reads: 
PROFI CREDIT BULGARIA  
 
7 
‘Articles 6(1) and 7(1) of Directive 93/13 and the principle of effectiveness must 
be interpreted as meaning that they preclude a system whereby the consumer may 
be made to bear part of the costs of proceedings depending on the level of the 
unduly paid sums which are refunded to him following a finding that a contractual 
term is void for being unfair, given that such a system creates a substantial 
obstacle that is likely to discourage consumers from exercising the right to an 
effective judicial review of the potential unfairness of contractual terms such as 
that conferred by Directive 93/13’. In the light of the foregoing, the question with 
which the court called upon to adjudicate on this matter is faced is whether that 
interpretation is applicable only in cases where it is practically impossible or 
excessively difficult for the consumer to exercise his or her rights, where the 
amount of the claim for refund of the payments made on the basis of the unfair 
term must be specified, or in all cases, including that involving the presence of an 
unfair term which does not affect, either in whole or in part, the amount of the 
claim, which is not directly related to the subject matter of the proceedings or, 
accordingly, the liability towards the creditor. This question is linked to the 
subject matter of the main proceedings inasmuch as, if the remuneration for 
‘ancillary services’ forms the ‘main subject matter’ of an agreement connected 
with the credit agreement and would accordingly have to be excluded from the 
calculation of the annual percentage rate of charge, the court, when giving 
judgment on the dispute, would also have to adjudicate on the apportionment of 
the costs of the proceedings. Under national law, the share of those costs payable 
depends on the extent to which the application is granted or dismissed, 
irrespective of the status of the party to the proceedings concerned.