CJEU, 4th chamber, October 17, 2024, No C-409/23

THE COURT (Fourth Chamber),

1 This request for a preliminary ruling concerns the interpretation of Article 2(2)(f) and of Article 3(g) of 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 (OJ 2008 L 133, p. 66).

2 The request has been made in proceedings between Riverty GmbH, as the legal successor of Arvato Finance BV (‘Arvato’), a provider of a deferred payment service, and MI, a consumer who opted for that service during an online purchase.

Legal context

European Union law

3 Recitals 10 and 13 of Directive 2008/48 state:

‘(10) The definitions contained in this Directive determine the scope of harmonisation. The obligation on Member States to implement the provisions of this Directive should therefore be limited to its scope as determined by those definitions. However, this Directive should be without prejudice to the application by Member States, in accordance with Community law, of the provisions of this Directive to areas not covered by its scope. A Member State could thereby maintain or introduce national legislation corresponding to the provisions of this Directive or certain of its provisions on credit agreements outside the scope of this Directive, for instance on credit agreements involving amounts less than EUR 200 or more than EUR 75 000. …

…

(13) This Directive should not apply to certain types of credit agreement, such as deferred debit cards, under the terms of which the credit has to be repaid within three months and only insignificant charges are payable.’

4 Article 2 of the directive, entitled ‘Scope’, provides as follows:

‘1. This Directive shall apply to credit agreements.

2. This Directive shall not apply to the following:

…

(c) credit agreements involving a total amount of credit less than EUR 200 or more than EUR 75 000;

…

(f) credit agreements where the credit is granted free of interest and without any other charges and credit agreements under the terms of which the credit has to be repaid within three months and only insignificant charges are payable;

…’

5 In accordance with Article 3 of that directive, entitled ‘Definitions’:

‘For the purposes of this Directive, the following definitions shall apply:

…

(c) “credit agreement” means an agreement whereby a creditor grants or promises to grant to a consumer credit in the form of a deferred payment, loan or other similar financial accommodation …

…

(g) “total cost of the credit to the consumer” means all the costs, including interest, commissions, taxes and any other kind of fees which the consumer is required to pay in connection with the credit agreement and which are known to the creditor, except for notarial costs; costs in respect of ancillary services relating to the credit agreement, in particular insurance premiums, are also included if, in addition, the conclusion of a service contract is compulsory in order to obtain the credit or to obtain it on the terms and conditions marketed;

…

(i) “annual percentage rate of charge” means the total cost of the credit to the consumer, expressed as an annual percentage of the total amount of credit, where applicable including the costs referred to in Article 19(2);

…’

6 Under Article 5 of that directive, entitled ‘Pre-contractual information’:

‘1. In good time before the consumer is bound by any credit agreement or offer, the creditor and, where applicable, the credit intermediary shall, on the basis of the credit terms and conditions offered by the creditor and, if applicable, the preferences expressed and information supplied by the consumer, provide the consumer with the information needed to compare different offers in order to take an informed decision on whether to conclude a credit agreement. Such information, on paper or on another durable medium, shall be provided by means of the Standard European Consumer Credit Information form set out in Annex II. …

The information in question shall specify:

…

(g) the annual percentage rate of charge and the total amount payable by the consumer …

…

(l) the interest rate applicable in the case of late payments and the arrangements for its adjustment, and, where applicable, any charges payable for default;

…’

7 Article 10 of Directive 2008/48, entitled ‘Information to be included in credit agreements’, provides in paragraph 2 thereof:

‘The credit agreement shall specify in a clear and concise manner:

…

(g) the annual percentage rate of charge and the total amount payable by the consumer …

…

(l) the interest rate applicable in the case of late payments as applicable at the time of the conclusion of the credit agreement and the arrangements for its adjustment and, where applicable, any charges payable for default;

…’

8 Under Article 19 of that directive, entitled ‘Calculation of the annual percentage rate of charge’:

‘1. The annual percentage rate of charge, equating, on an annual basis, to the present value of all commitments (drawdowns, repayments and charges), future or existing, agreed by the creditor and the consumer, shall be calculated in accordance with the mathematical formula set out in Part I of Annex I.

2. For the purpose of calculating the annual percentage rate of charge, the total cost of the credit to the consumer shall be determined, with the exception of any charges payable by the consumer for non-compliance with any of his commitments laid down in the credit agreement and charges other than the purchase price which, for purchases of goods or services, he is obliged to pay whether the transaction is effected in cash or on credit.

The costs of maintaining an account recording both payment transactions and drawdowns, the costs of using a means of payment for both payment transactions and drawdowns, and other costs relating to payment transactions shall be included in the total cost of credit to the consumer unless the opening of the account is optional and the costs of the account have been clearly and separately shown in the credit agreement or in any other agreement concluded with the consumer.

3. The calculation of the annual percentage rate of charge shall be based on the assumption that the credit agreement is to remain valid for the period agreed and that the creditor and the consumer will fulfil their obligations under the terms and by the dates specified in the credit agreement.

…’

9 Article 22 of that directive, entitled ‘Harmonisation and imperative nature of this Directive’, provides in paragraph 3 thereof:

‘Member States shall further ensure that the provisions they adopt in implementation of this Directive cannot be circumvented as a result of the way in which agreements are formulated, in particular by integrating drawdowns or credit agreements falling within the scope of this Directive into credit agreements the character or purpose of which would make it possible to avoid its application.’

10 Annex II to that directive is entitled ‘Standard European Consumer Credit Information’. That annex provides several items of information to be supplied to the consumer concerning, inter alia, the identity and contact details of the creditor or credit intermediary, the main characteristics of the credit product, as well as the cost of the credit and the related costs. The latter point includes the charges for which the consumer is liable in the event of late payment.

Netherlands law

11 The Burgerlijk Wetboek (Civil Code) provides in Article 57(1)(g) and (2) of Book 7:

‘1. For the purpose of this Title the following definitions shall apply:

…

(g) “total cost of the credit to the consumer”: all the costs, including interest, commissions, taxes and any other kind of fees which the consumer is required to pay in connection with the credit agreement and which are known to the creditor except for notarial costs; …

…

2. The total cost of the credit to the consumer, referred to in paragraph 1(g), shall also include costs in respect of ancillary services relating to the credit agreement, in particular insurance premiums, if the conclusion of a service contract is compulsory in order to obtain the credit or to obtain it on the terms and conditions marketed.’

12 Under Article 58(2)(e) of Book 7 of that code:

‘…

2. This Title does not apply to:

…

(e) credit agreements where the credit is granted free of interest and without any other charges and credit agreements under the terms of which the credit has to be repaid within three months and only insignificant charges are payable; …’

The dispute in the main proceedings and the questions referred for a preliminary ruling

13 Riverty is the legal successor of Arvato, which operated under the name AfterPay. AfterPay was the provider of the eponymous deferred payment service, offered on online purchases, in return for a payment fee of EUR 1.

14 According to the general payment terms used by Arvato, the decision to pay by means of that service presupposed that, after acceptance of the request to use that service, the trader assign to AfterPay the fees relating to the amount for which the customer was liable in respect of the order placed online. That customer could only pay AfterPay in full discharge of obligations and, to that end, received an invoice stating the amount due, separately from the delivery of that order. Payment was to be made within 14 days of the date of invoicing, unless a different period was agreed in writing.

15 Failing payment within the prescribed period, the amount due was payable immediately without the need to send that customer a further formal notice. In that situation, Arvato reserved the right to charge administrative fees, the amount of which was increased with each payment reminder, monthly statutory interest on the amount due and all reasonable costs incurred in securing payment through judicial or extrajudicial means. The minimum amount charged for out-of-court collection costs was EUR 40.

16 On 27 February 2019 or a little before that date, MI purchased, as a consumer, three products from an online shop for a total amount of EUR 37.97 (‘the purchase price of the goods’). On that occasion, she chose the AfterPay service as the method of payment.

17 On the same day, Arvato sent a payment summary to the email address provided by that consumer for an amount of EUR 38.97, consisting of the purchase price of the products and the payment fee of EUR 1, setting the deadline for payment at 13 March 2019. It also stated that failure to pay within that period would lead to an increase of EUR 40 in the amount due by way of out-of-court collection costs, in accordance with the applicable Netherlands legislation.

18 Between 15 March and 6 December 2019, six payment reminders were sent by Arvato to that consumer by email. Those emails indicated the obligation to pay the purchase price of the products and specified the administrative fees resulting from the failure to comply with that obligation, first, in the amount of EUR 9.50 and, subsequently, in the amount of EUR 12.50. By the last email, sent on 6 December 2019, Arvato claimed from the same consumer payment of the purchase price of the goods within 15 days of receipt of the latter email, without prejudice, in the event of non-payment, to invoice the consumer for an additional amount of EUR 40 in respect of collection costs.

19 Arvato brought an action before the Kantonrechter te Arnhem (District Court (Cantonal Sector), Arnhem, Netherlands) seeking an order requiring MI to pay a sum of EUR 80.20, plus statutory interest calculated on the amount of EUR 38.97, with effect from 9 October 2020. Arvato subsequently reduced the amount thus claimed, as it waived its fee of EUR 1.

20 In accordance with national law, the Kantonrechter te Arnhem (District Court (Cantonal Sector), Arnhem) referred several ‘questions for a preliminary ruling’ to the Hoge Raad der Nederlanden (Supreme Court of the Netherlands), which is the referring court. Those questions relate to whether default interest, that is to say interest other than that relating to remuneration for making the credit available, and out-of-court collection costs payable by a consumer in the event of non-performance of a credit agreement forms part of the credit costs or whether it is necessary to take that interest and other charges into account in order to assess whether the credit agreement in question is an agreement ‘free of interest and without any other charges’ or an agreement under the terms of which ‘only insignificant charges are payable’ within the meaning of Article 2(2)(f) of Directive 2008/48, or whether account must be taken, in the context of the examination of those questions, of the statutory or contractual nature of such interest and other charges and the amount thereof in relation to the statutory scales.

21 The referring court states that the concept of ‘total cost of the credit to the consumer’, provided for in Article 3(g) of Directive 2008/48, was transposed into Netherlands law ‘as literally as possible’ in Article 57(1)(g) and (2) of Book 7 of the Civil Code. According to that court, Article 58(2)(e) of Book 7 of that code reproduces the wording of Article 2(2)(f) of that directive concerning the exclusion of credit agreements ‘free of interest and without any other charges’ and of agreements ‘under the terms of which the credit has to be repaid within three months and only insignificant charges are payable’, within the meaning of the latter provision.

22 In answer to some of the questions addressed to it by the Kantonrechter te Arnhem (District Court (Cantonal Sector), Arnhem), the referring court considers that an agreement under the terms of which a deferred payment is stipulated constitutes a credit agreement where it satisfies the conditions laid down by the national legislation applicable for the purposes of such classification and that the concept of ‘other charges’, within the meaning of Article 58(2)(e) of Book 7 of the Civil Code, must be ‘combined’ with that of the ‘total cost of the credit to the consumer’ within the meaning of Article 57(1)(g) of Book 7 of that code.

23 However, the referring court considers that neither Directive 2008/48 nor the Court’s case-law on that directive provides an answer to the question whether default interest and out-of-court collection costs must be regarded as credit costs and whether they must be taken into account in order to determine whether the agreement in question constitutes a credit agreement ‘free of interest and without any other charges’ or a credit agreement ‘[under the terms of which] only insignificant charges are payable’ within the meaning of Article 2(2)(f) of that directive.

24 In this respect, as regards, in the first place, the national legal framework, the referring court states that the default interest and the out-of-court collection costs at issue in the main proceedings refer to interest and costs incurred by the creditor in obtaining payment of its claim out of court. It is apparent from the request for a preliminary ruling that, where the debtor is a natural person who is acting for purposes outside his or her trade or profession, the Civil Code provides that the compensation claimed in respect of out-of-court collection costs corresponds to a percentage of the principal debt and may not be less than EUR 40 or more than EUR 6 775.

25 It is also apparent from that request that, in relation to credit agreements falling within the scope of Directive 2008/48, the Netherlands legislation prohibits the creditor from demanding a credit fee in excess of the maximum fee permitted by law and that that maximum fee includes default interest and out-of-court collection costs, the creditor being unable, consequently, to claim compensation in respect of out-of-court collection costs which has the effect of increasing the credit fee beyond the maximum permitted.

26 As regards, in the second place, the relevant provisions of Directive 2008/48, the referring court infers from a combined reading of Article 5(1)(l), Article 10(2)(l) of, and of Annex II to, that directive that the charges payable in the event of late payment, which include default interest and out-of-court collection costs claimed in the present case, must be included in the ‘total cost of the credit to the consumer’ referred to in Article 3(g) of that directive.

27 The referring court adds that although it follows from Article 19(3) of that directive that default charges payable in the event of non-performance of a contractual obligation are not taken into account in the calculation of the annual percentage rate (APR), that does not mean that those charges cannot be included in the total cost of the credit to the consumer.

28 However, the referring court states that it is also possible to take the view that those charges can be included in the ‘total cost of the credit to the consumer’ only if the conditions under which the credit was granted and the other circumstances present at the time when the agreement was concluded provide grounds for assuming that the liability for those charges forms part of the creditor’s business model.

29 As regards the exception provided for in Article 2(2)(f) of Directive 2008/48, that court submits that it could be rendered meaningless if it were held that the interest and the other charges provided for in that provision had to include interest and out-of-court collection costs payable by law in the event of non-payment.

30 In those circumstances the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Do default interest and out-of-court costs belong to the total cost of the credit to the consumer within the meaning of Article 3(g) of [Directive 2008/48], and must they be taken into account in the determination of whether there is a credit agreement where the credit is granted “free of interest and without any other charges” or one under the terms of which “only insignificant charges are payable” within the meaning of Article 2(2)(f) of [that directive]?

(2) Does the answer to Question 1 differ if the default interest and out-of-court costs are payable by law or stipulated by contract? If the default interest and out-of-court costs are stipulated, does it make any difference if that interest and those costs are higher than what would be payable by law in the absence of the stipulation?’

Consideration of the questions referred

Preliminary observations

31 As a preliminary point, it should be noted that it is apparent from the observations of the Netherlands Government that Directive 2008/48 was made applicable by Netherlands national law to credit agreements involving a total amount of credit of less than EUR 200.

32 It should also be noted that, in order to answer the questions referred by the national court, it is necessary to examine two aspects. The first concerns, in essence, the interpretation of the concepts of ‘interest’ and ‘other charges’ within the meaning of Article 2(2)(f) of Directive 2008/48 and the question whether the statutory or contractual origin of the default interest and the out-of-court collection costs claimed by the creditor in the event that the consumer defaults on his or her payment obligation under a credit agreement and, where appropriate, the amount thereof constitute useful criteria for the purposes of that interpretation. The second concerns the interpretation of the concept of ‘total cost of credit to the consumer’ provided for in Article 3(g) of that directive.

33 As is apparent from the request for a preliminary ruling, the referring court makes a link between the concept of ‘other charges’, within the meaning of Article 2(2)(f) of Directive 2008/48, and that of ‘total cost of the credit to the consumer’, within the meaning of Article 3(g) of that directive, the referring court querying whether default interest and out-of-court collection costs fall within the scope of both of those concepts.

34 That said, Article 2(2)(f) of Directive 2008/48 contributes to defining the scope of that directive and may, possibly, render it pointless to answer the question whether default interest and out-of-court collection costs fall within the concept of ‘total cost of the credit to the consumer’, within the meaning of Article 3(g) of that directive.

35 Consequently, it is necessary, first of all, to interpret Article 2(2)(f) of Directive 2008/48 and to examine the relevance of the statutory or contractual nature of the interest and default charges and, where appropriate, the amount thereof for the purposes of that interpretation, before then examining, if necessary, the scope of the concept of ‘total cost of the credit to the consumer’, within the meaning of Article 3(g) of that directive.

The second part of the first question and the second question

36 By the second part of the first question and the second question, which it is appropriate to examine together and in the first place, the referring court asks, in essence, whether Article 2(2)(f) of Directive 2008/48 must be interpreted as meaning that the default interest and the out-of-court collection costs for which a consumer is liable in the event of late payment or non-performance of his or her payment obligation under a credit agreement fall within the concepts of ‘interest’ and ‘other charges’ within the meaning of that provision. That court also asks whether the statutory or contractual origin of that interest and other charges and the fact that, as the case may be, that interest and other charges arising under an agreement are higher than what would be payable by law constitute relevant information for the purposes of that interpretation.

37 In that regard, it must be stated that the default interest and out-of-court collection costs at issue in the main proceedings constitute, as the referring court states, interest and default charges.

38 Under Article 2(2)(f) of Directive 2008/48, credit agreements ‘free of interest and without any other charges’ and credit agreements ‘under the terms of which the credit has to be repaid within three months and only insignificant charges are payable’ are excluded from the scope of that directive.

39 In order to interpret that provision and, in particular, the concepts of ‘interest’ and ‘other charges’ contained therein, account must be taken, in accordance with settled case-law, not only of the wording of that provision, but also of its context and of the objectives and purpose pursued by the measure of which it forms part (see, to that effect, judgment of 11 January 2024, Inditex, C 361/22, EU:C:2024:17, paragraph 43 and the case-law cited).

40 As regards, in the first place, the wording of Article 2(2)(f) of Directive 2008/48, it should be noted that that provision merely refers to ‘interest’ and ‘other charges’ without defining those concepts and without referring to other concepts also used in the context of that directive, in particular those of ‘default charges’, ‘costs in the case of late payments’, ‘costs’, ‘commissions’ or ‘taxes’.

41 The concept of ‘interest’, in its literal meaning, refers both to interest accrued or payable on invested or loaned capital and to compensatory or default interest and thus has several possible meanings.

42 The concept of ‘other charges’ is also a generic concept capable of covering several categories of expenditure, with the result that that concept varies in content depending on the context in which it is used.

43 That said, a comparison of the different language versions of Article 2(2)(f) of Directive 2008/48 provides some indications concerning the interpretation to be given to the concepts of ‘interest’ and ‘other charges’ within the meaning of that provision. In particular, those versions include those which, more succinctly, refer only to the absence of interest or other charges, such as the German version (‘zins- und gebührenfreie Kreditverträge’), the Greek version (‘symvaseis pistosis oi opoies einai atokes kai choris alles epivarynseis’), the French version (‘contrats de crédit sans intérêt et sans autres frais’) or the Dutch version (‘kredietovereenkomsten zonder rente en andere kosten’). In other language versions, in particular in the Spanish version (‘los contratos de crédito concedidos libres de intereses y sin ningún otro tipo de gastos’), the English version (‘where the credit is granted free of interest and without any other charges’), the Croatian version (‘ugovore o kreditu prema kojima se kredit odobrava bez kamata i bez bilo kakvih drugih naknada’), the Italian version (‘contratti di credito che non prevedono il pagamento di interessi o altre spese’) or the Romanian version (‘contractele de credit în baza cărora creditul este acordat fără dobândă și fără alte costuri’), reference is made explicitly to the fact that credit is granted without interest or other expenses being provided for.

44 It is clear from the wording of those other versions that the applicability of Article 2(2)(f) of Directive 2008/48 must be examined taking into account the interest and other charges provided for at the time of conclusion of the credit agreement. The non-performance by a consumer of his or her payment obligation and the duration of any such non-performance are, in principle, unforeseeable at that time. Accordingly, interest and default charges do not form part of ‘interest’ and ‘other charges’ within the meaning of Article 2(2)(f) of Directive 2008/48, irrespective of whether the application and level of that interest and those charges are provided for by law or stipulated in the credit agreement.

45 That interpretation is supported by the context of that provision and by the objectives pursued by Directive 2008/48.

46 Thus, with regard, in the second place, to the context of that provision, it should be noted that, in accordance with Article 19(2) and (3) of Directive 2008/48, default charges are excluded from the calculation of the APR, that calculation being based on the assumption that the credit agreement will remain valid for the period agreed and that the creditor and the consumer will fulfil their obligations under the terms and within the time limits specified in that agreement. Therefore, it is necessary to start from that assumption in order to interpret Article 2(2)(f) of that directive.

47 In the third place, the interpretation set out in paragraph 44 of the present judgment is consonant with the objective pursued by Article 2(2)(f) of Directive 2008/48, which seeks, like the other provisions of that article, to define the scope of that directive. If interest and default charges were to be taken into account in order to establish whether a contract falls within the scope of that directive, that provision would be largely deprived of its substance and effectiveness, since it would apply only in very unlikely cases in which the delay or failure to pay would have no legal consequences for the creditor, namely neither the imposition of default interest nor other charges as a result of the non-performance of the payment obligation.

48 In the present case, Arvato claims payment of the purchase price of the products in the amount of EUR 37.97 plus statutory interest from 9 October 2024 and the payment of out-of-court collection costs of EUR 40, the amount of which falls within the lower limit of the range laid down by the Netherlands legislation. Such interest and charges do not, in principle, fall within the concepts of ‘interest’ and ‘other charges’ within the meaning of Article 2(2)(f) of Directive 2008/48 and must therefore not be taken into consideration in order to determine whether the credit agreement concerned falls within the scope of that directive.

49 The referring court and the Netherlands Government submit, however, that it cannot be ruled out that the circumstances present at the time when the agreement in question was concluded provide grounds for assuming that the liability for default charges forms part of the creditor’s business model, a situation in which those charges should be taken into account when examining the applicability of Article 2(2)(f) of Directive 2008/48.

50 In that regard, it must be borne in mind that Article 22(3) of Directive 2008/48 requires the Member States to ensure that the provisions they adopt in implementation of that directive cannot be circumvented as a result of the way in which agreements are formulated (judgment of 11 September 2019, Lexitor, C 383/18, EU:C:2019:702, paragraph 30).

51 It will therefore be for the referring court to ascertain whether, in reality, the creditor is seeking to circumvent its obligations under Directive 2008/48 by anticipating, from the time the credit agreement is concluded, the non-performance by the consumer of the payment obligation in order to seek an economic advantage from the latter’s liability for interest and default charges. To that end, it will be for that court to examine all the circumstances present at the time when the agreement in question was concluded and other relevant information, such as, inter alia, the statutory or contractual origin of the interest and default charges, the periods within which that interest and those charges become payable and the amount of that interest and those charges.

52 In the light of all the foregoing considerations, the answer to the second part of the first question and the second question is that Article 2(2)(f) of Directive 2008/48 must be interpreted as meaning that, save where the creditor anticipates, from the time the credit agreement is concluded, the non-performance by the consumer of the payment obligation in order to seek a financial advantage, the default interest and the out-of-court collection costs which a consumer is liable to pay in the event of late payment or non-performance of his or her payment obligation under a credit agreement do not fall within the concepts of ‘interest’ and ‘other charges’, within the meaning of that provision, irrespective, in principle, of whether such interest and other charges are statutory or contractual in origin and of whether, as the case may be, such interest and other charges arising under an agreement are greater than would be payable by law.

The first part of the first question

53 In the light of the answer given to the second part of the first question and the second question, there is no need to answer the first part of the first question.

Costs

54 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Fourth Chamber) hereby rules:

Article 2(2)(f) of 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

must be interpreted as meaning that save where the creditor anticipates, from the time the credit agreement is concluded, the non-performance by the consumer of the payment obligation in order to seek a financial advantage, the default interest and the out-of-court collection costs which a consumer is liable to pay in the event of late payment or non-performance of his or her payment obligation under a credit agreement do not fall within the concepts of ‘interest’ and ‘other charges’, within the meaning of that provision, irrespective, in principle, of whether such interest and other charges are statutory or contractual in origin and of whether, as the case may be, such interest and other charges arising under an agreement are greater than would be payable by law.