May Banks collect an extra fee for Sending a TAN

The Federal Court of Justice (re XI ZR 260/15) was sought to clarify if banks may charge a fee to customers for sending them a TAN (transaction number) per text message for their client to legitimize a transaction.

In this case, the Federal Association of Consumer Center sued the Regional Savings Bank Groß-Gerau for unreasonably billing their customers. The bank generally charges private clients € 2 / month and another € 0.10 for each TAN message. The BGH considered this “pricing without exceptions” as illegal. Banks’ use of fine print declaring such are also invalid.

Banks may not demand an extra fee for sending a TAN on a flat basis. The bank has to make sure that this code was really used to realize a transaction. If the client did not use the TAN to legitimize a transfer, the bank may not collect such fee. The judges asserted that a customer might not want to use the code because of a justified suspicion of phishing or the transaction period has elapsed. It can also be that the bank had a technical issue and the wire was not done. The judges emphasized that conceptually such fee is nothing to complain about but it has to genuinely used.

On the one hand, consumer rights advocates were disappointed with this precedence because it does not contribute to banks’ price transparency. The responsible persons in the banks will now have headaches implementing processes to comply with this judgement as it lacks practical understanding of the technical realities of the situation. Many will just drop this stipulation.

What now to expect from banks in regards to this judgment? Banks have costs when sending text messages or when supplying a TAN generator – measures to secure a safe transaction. You can expect that they will be passing this on to their customer – you.