New protection for borrowers: How to request money back!

New protection for borrowers: How to request money back!

From January 1, 2025, new consumer protection rules for borrowers will come into force in Germany, which particularly affect the conclusion of residual debt insurance (RSV). The government is responding to widespread criticism and abuses in the distribution of these insurance policies, which were often offered in conjunction with loan agreements.

A key innovation in the regulations is that banks are no longer allowed to sell RSV directly when taking out a loan. This measure aims to better protect consumers and ensure that they are fully informed about the costs, risks and alternatives of residual debt insurance before taking out a loan. To date, many customers have experienced RSVs being sold to them as mandatory, giving the impression that they would not be able to obtain a loan without this insurance. The Federal Consumer Protection Minister Steffi Lemke emphasized that this will significantly change the temporal decoupling of loan contracts and insurance.

Transparency and obligation to provide information

The new regulations impose comprehensive information obligations for banks and intermediaries. In the future, you must clearly explain the various options and also show possible alternatives to RSV. In addition, an RSV may only be offered for the loan no earlier than seven days after the conclusion of the contract. These new requirements are intended to ensure that consumers can make more conscious and informed decisions.

Market research has shown that a significant proportion of consumers felt pressured when taking out residual debt insurance. According to a study by BaFin, 6% of mystery shoppers said they had been pressured into taking out an RSV. The previous regulations in the Insurance Contract Act (VVG) were unable to adequately address these problems, so the new regulations are seen as an important step towards improving consumer rights.

Possible refunds for consumers

In addition, there are options for consumers who have taken out an RSV in the past to claim their money back. This means those affected can hope for a full refund if they have taken out insurance in the past. In the respective review, claims for pro rata repayments in the event of early repayment of the loan as well as the reversal of the entire loan agreement in the event of inadequate advice can also be taken into account.

Experts advise consumers to examine their individual cases, especially if they have taken out a car or installment loan in the last few years and credit insurance was recommended. These measures could represent a positive change for many borrowers and curb unlawful practices in the sale of residual debt insurance.

Overall, the new regulations show that the legislature has reassessed the framework for consumer loans and the associated insurance in order to strengthen the protection of borrowers and promote transparency. The measures come into force to create a fairer market in the future and avoid excessive costs. Interested consumers can rely on further information from banks and insurance companies to make well-informed decisions.