German Federal Court curtails fees on retirement savings contracts and credit‑record storage

The Federal Court of Justice (Bundesgerichtshof) ruled that annual administration fees imposed on Riester‑building‑savings contracts are invalid because they shift costs that primarily benefit the building‑savings institution onto consumers. The court classified such fees as ancillary price agreements subject to substantive control, stating that the related activities are largely in the bank’s own interest and therefore cannot be charged as a blanket annual fee.

In a separate decision, the court held that the credit‑information agency SCHUFA may retain records of settled payment defaults for up to three years. The ruling emphasized a GDPR‑based balancing of interests, rejecting a blanket application of deletion periods used for public registries. The judgment clarifies the legal standards for how long private credit bureaus can store information on fully paid debts.

Both decisions set new precedents for German consumer‑financial law, limiting charge practices on retirement savings products and defining data‑retention limits for credit reporting.