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Dunning Fees Reloaded

Dunning Fees Reloaded

|   Branchennews ( Newsletter )

Since time immemorial, a discussion has raged as to high dunning fees can be for defaulting debtors. The German Federal Constitutional Court has now added a further point for discussion and has drawn very clear limits.

Since time immemorial, a discussion has raged as to high dunning fees can be for defaulting debtors. The German Federal Constitutional Court has now added a further point for discussion and has drawn very clear limits.

 

For many companies, it's one of the major annoyances: customers who don’t pay. Even if they just involve small amounts, outstanding bills can add up to considerable sums. In the past, many have thus charged eye-wateringly high dunning fees for the purposes of deterrence and compensation. The BGH has once again put a stop to this and defined very precisely what it deems to be legitimate.

Flat dunning fees are inadmissible according to general terms and conditions law (more precisely, § 309 No. 5 (c) of the German Civil Code). Instead, chargeable costs must be set out clearly. As a rule of thumb, it can be said that only immediately incurred costs may be used in the calculation. These include the bank fees for the chargeback of one’s own bank and the third-party bank, though no disproportionately high contractually guaranteed fees may be used for the calculation. The chargeable costs also include postage and material costs for the sending of the dunning letter, which, for example, covers printing, insertion in an envelope, franking, and conveyance of the dunning notice.

What definitely cannot be charged to the debtor are internal costs. Unfortunately, staff costs, staff costs, expenditure of labour and time, and other similar costs are not allowed to be passed on.

 

Companies should thus check their costs exactly and limit the allocation to the dunning fees to a bare minimum.

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