Court: Collection practices by Otto subsidiary illegal

According to a judgment by the Hanseatic Higher Regional Court, the collection behavior of the Otto Group company EOS Investment GmbH is illegal.

The judges approved the model declaratory action brought by the Federal Association of Consumer Organizations on Thursday, the court announced. So far, EOS Investment GmbH has had outstanding claims assigned to it by companies in the Otto Group and third parties, but then does not collect them itself, but leaves this to the specialized sister company EOS Deutscher Inkasso- Dienst GmbH (EOS DID GmbH). The resulting collection costs are then billed to the defaulting consumer, which the consumer advice center considers illegal.

The court is convinced that these costs do not actually represent any compensable default damage by the defendant. Accordingly, the 15 consumers named in the model declaratory judgment would not have to pay the collection costs demanded of them and could reclaim payments already made. The verdict is not yet legally binding. Because of the fundamental importance of the matter, the Higher Regional Court allowed the appeal, which the Federal Court of Justice would have to decide on if EOS Investment GmbH makes use of this option.

According to the court, EOS Investment GmbH demanded sums in the amount of legal fees from consumers for the activities of the sister company EOS DID GmbH. The court explained that the consumers were all in arrears with their payments and were therefore fundamentally obliged to reimburse legal costs. However, this only applies if these costs are actually incurred. In the opinion of the court, however, this is not the case because of the remuneration structure agreed between the two companies. It is merely a fictitious damage item for which no compensation can be claimed.

The verdict goes beyond the 15 individual cases. It also works for consumers who have been entered in the register of complaints kept by the Federal Office of Justice. According to the court, around 680 consumers had filed claims for the model declaratory judgment procedure. (dpa)

ttn-12