When Is a Contract Not a Contract?

Sparkasse Ulm Allgoewer imagebroker okapia
The days are not looking so sunny anymore at Sparkasse Ulm.
  • Why it matters

    Why it matters

    • The ruling could set a precedent for banks attempting to change or terminate contracts that have become lucrative for savers in times of persistently low interest rates.
  • Facts


    • A total of 20,000 customers opened a Sparkasse Ulm savings account guaranteeing interest of 3 percent until 2030.
    • The public savings bank wants to get out of the costly account contracts.
    • About 6,000 savers still hold a Scala account, and 60 of them sued the bank for fulfillment of the contract.
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It was the second attempt to sort out the long-running legal dispute, but despite the very public setting, once again Sparkasse Ulm savings bank failed to reach an amicable settlement with its disgruntled customers.

The clients had signed contracts for savings accounts offering attractive interest rates, which the bank no longer wanted to pay. Depositors sued over the so-called “Scala” savings agreements, and the legal dispute will now continue following the latest failure. A verdict is expected on January 26.

The proceedings this week were doubtlessly sobering for Sparkasse Ulm, with Judge Julia Böllert maintaining her hard line against the financial institution. She reaffirmed that the law required the savings bank to adhere to its contracts, which have been lucrative for savers in this time of low interest rates.

The public dispute over savings contracts is new to Germany. Amid mounting losses, Sparkasse Ulm, part of the public Saving Banks Finance Group, was pushing clients out of the Scala agreements, some of which still had many years to run. The agreements offer interest at rates of more than 3 percent and run until 2030 at the latest.

“Scala” derives from the Italian word for “stairway.” In the contracts, savers received an increasing bonus in addition to variable basic interest rates.

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