Pfando has to pay compensation to customers who have been cheated

Created: 11/16/2022, 6:04 p.m

The Federal Court of Justice has ruled in a model case on combined purchase and rental agreements from Pfando with an exploitation clause for motor vehicles.

© Monika Skolimowska/dpa

It may sound tempting for people in need of money: At Pfando, they can get cash for their car and still be able to continue driving it.

In at least one case, however, there was a catch.

Karlsruhe - Customers who have lost not only their car but also a lot of money to the pawn shop Pfando can hope for compensation.

In a model case, the Federal Court of Justice (BGH) ruled that the customer concerned was cheated by the "cash & drive" Pfando business model.

It is a "usury-like legal transaction".

The Karlsruhe judges awarded the man damages in the last instance.

In three other cases, the competent Higher Regional Court must now examine whether there are also claims.

The Berlin company Pfando, which has more than 25 branches nationwide, describes itself as the better "alternative to the car pawn shop" and market leader in its field.

"At Pfando you can get cash for your car in 60 minutes and you can continue driving as usual!", says the website.

This is implemented with a combination of a purchase and rental agreement.

In all four cases, the customers actually sold their car to Pfando for the required amount - always below value.

At the same time, they rented the car back for six months.

Pfando will keep the car after missing a month's rent

The man to whom Pfando now has to pay damages received, for example, 5,000 euros for his BMW, which was worth almost 14,000 euros.

He rented it back for 495 euros a month.

Since his lease was extended beyond half a year, he paid another 4,455 euros to Pfando in this way - until he owed one month's rent.

With that the car was gone.

In the event of a delay in payment, Pfando reserves the right to terminate the rental agreement immediately.

A release in the event that the customer should come back to money is not provided anyway, unlike in the classic pawn shop.

Instead, it was agreed in the older contracts that the car should always be publicly auctioned at the end of the rental period.

The original owner was allowed to participate in this.

However, any additional proceeds should only flow to other buyers.

New contracts, new approach

According to a law firm commissioned by Pfando, the auction is no longer included in the new contracts.

In a sample rental contract that was sent to the German Press Agency, it currently says: "The renter loses his right of ownership of the vehicle upon termination of the contract." returned to the landlord within a period of 24 hours”, i.e. to Pfando.

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The background is probably that the courts had previously primarily examined whether there was a violation of the trade regulations, namely a prohibited buyback transaction.

According to the Supreme Court, this is not the case.

The top civil judges see a completely different problem for this: "In view of the conditions offered to customers", a nullity of the contracts due to usury cannot be ruled out, said the chairwoman Rhona Fetzer at the verdict.

Senate suspects "reprehensible attitude" of the defendants

In the case of the BMW driver, the case was clear for the Senate: In view of the “particularly gross disproportion” between the purchase price and the value of the car, “a reprehensible attitude on the part of the defendant is suspected”.

Other agreements also speak in favor of “cheating the plaintiff”.

During the rental period, the man also had to bear all the costs for insurance, taxes and repairs.

Pfando now has to pay the man 16,000 euros in damages.

That's how much it would cost to get a car like the auctioned one back.

He also gets the rent back - all minus the 5,000 euros that he received from Pfando in cash.

Whether there is usury must be examined in court for each customer individually.

The Erfurt lawyer Holger Schilling, who looks after a three-digit number of cases, is very confident that many other victims are entitled to compensation.

"Even for the completely new cases that we have, I would affirm usury everywhere from what I heard today," he said in Karlsruhe.

A comparable disproportion to performance is present in each of his cases.

(Az. VIII ZR 221/21 and others) dpa