Supreme Court: seller-paid credit fee keeps zero-rate loan outside credit act

In January 2023 a consumer bought a dental treatment for 20,796 krDomsdatabasen and chose at checkout between paying by card and a payment plan described as interest- and fee-free. She chose the plan and undertook to repay 20,796 krDomsdatabasen to Sundhed+ ApS (formerly CMC Finans ApS) over 12 months at a debtor rate of 0.00 per centDomsdatabasen and total credit costs of 0.00 krDomsdatabasen. Under its cooperation agreement with the seller Smily ApSDomsdatabasen, the creditor transferred the purchase sum minus 11.37 per cent to the seller as its consideration for providing the creditDomsdatabasen.

Smily was declared bankrupt on 24 March 2023Domsdatabasen before the consumer received any treatmentDomsdatabasen. She kept paying under protest and argued that Smily's non-performance could be raised against the creditor, so she need not perform the credit agreement.

For the outcome of the case it was decisive whether the credit agreement was covered by kreditaftalelovenDomsdatabasen. Inside the Act, a consumer can in defined linked-credit situations raise the seller's non-performance against the creditor under § 33, stk. 4, jf. stk. 3Domsdatabasen. Højesteret expressly noted that no equivalent defence exists on an unstatutory basis outside the ActDomsdatabasen.

The then-applicable § 3, stk. 1, nr. 1 excludes credit granted free of interest and without other chargesDomsdatabasen. The preparatory works to Act no. 535 of 26 May 2010 state that the exclusion requires no establishment costs, running costs or interest of any kind, whether payable to the creditor or to a third partyRetsinformation. The provision implements Article 2(2)(f), first indent, of Directive 2008/48/ECDomsdatabasen.

Højesteret holds that whether credit counts as interest- and cost-free for the consumer depends in the first place on what follows from the agreement between the creditor and the consumerDomsdatabasen, with two qualifications. Where the price is higher on a credit purchase than without credit, the credit is not free whatever the agreement saysDomsdatabasen. The same applies where it cannot be established whether the price would have been the same without creditDomsdatabasen, because it is for the creditor to prove that a credit agreement is not covered by the Act, cf. § 1, stk. 3Domsdatabasen.

Here the agreement granted the credit free of interest and costsDomsdatabasen, and the Court took it as established that the treatment would have cost the same without creditDomsdatabasen. The credit was therefore also in reality free for this consumerDomsdatabasen, and the 11.37 per cent paid by the seller alone did not change thatDomsdatabasen.

The agreement accordingly fell outside kreditaftalelovenDomsdatabasen, and the consumer had to pay the creditorDomsdatabasen even though Smily never provided the treatmentDomsdatabasen. Reversing Østre LandsretDomsdatabasen, Højesteret ordered her to repay 63,659.11 krDomsdatabasen plus 65,000 kr in costsDomsdatabasen for the three instances. The amounts awarded must be paid within 14 days of delivery of the Supreme Court judgmentDomsdatabasen, with interest on the costs award under rentelovens § 8 a.

For advisers on seller-financed instalment or zero-interest plans, the point is that a seller-paid handling fee alone does not bring the credit within the Act where the consumer-facing price is unchanged and the creditor proves itDomsdatabasen. Outside the Act the § 33 linked-credit remedy is unavailableDomsdatabasen, so protection against seller insolvency must be secured elsewhere.

Legal basis: kreditaftaleloven § 1, stk. 1 and 3, § 3, stk. 1, nr. 1 and § 33, stk. 3-4, with Directive 2008/48/EC Article 2(2)(f).