Case law

  • Case Details
    • National ID: 4 Ob 29/10h
    • Member State: Austria
    • Common Name:link
    • Decision type: Supreme court decision
    • Decision date: 11/05/2010
    • Court: Austrian Supreme Court (Vienna)
    • Subject:
    • Plaintiff:
    • Defendant:
    • Keywords: false impression, fine print, misleading price
  • Directive Articles
    Unfair Commercial Practices Directive, Annex I, 20.
  • Headnote
    An advertisement that claims "0% interest", but states in its fine print that the actual annual percentage rate is higher, is misleading and infringes Annex I-20 of the UCP Directive.
  • Facts
    An advertisement promoted the purchase of furniture. The advertisement contained eye-catching statements including "Buy now – pay 2009" and "4 years 0% interest". The fine print stated, however, that the actual annual percentage rate was higher, e.g., 1,9 % or 5,2 %.

    The plaintiff, the Austrian Association for Consumer Protection (VKI – Verein für Konsumenteninformation) claimed that the advertisement is misleading, as the credit is described as free, while the consumer has to pay higher costs than the unavoidable banking costs. In fact, only the legal transaction fees (Rechtsgeschäftsgebühr), which have to be paid in Austria upon the conclusion of certain contracts including credit contracts, were deemed unavoidable. The reference indicating the actual costs of the credit was very small in size (no more than 2 mm).
  • Legal issue
    (1) The court considered that the overall impression of the advertisement was that a consumer may get a cost-free credit, which was not actually true as both unavoidable legal transaction costs and other costs had to be paid. Thus, the court concluded that the defendant's practice fell within the scope of Annex I-20 and, as a "black list practice", was prohibited without further considerations required. [Note that the court did not expressly confirm this statement but simply concluded that the advertisement was misleading (without any reference to the black list).]

    (2) The small reference did not sufficiently clarify the actual facts for consumers, in particular as the eye-catching element advertised the credit as "without costs for interest", and the size of the reference was not only 2 mm in height, whereas the eye catching elements were clearly larger in size.
  • Decision

    Is an advertisement that claims 0% interest in its title, misleading in the sense of Annex I-20 of the UCP Directive, when the actual annual percentage rate -- as explained only in the accompanying fine print -- is higher than 0%?

    URL: http://www.ris.bka.gv.at/Dokument.wxe?Abfrage=Justiz&Dokumentnummer=JJT_20100511_OGH0002_0040OB00029_10H0000_000

    Full text: Full text

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  • Result
    The plaintiff's request was granted, and the advertisement was found to be misleading as regards the main characteristics of the product.