Digest of Credit Disputes: How Courts Verify SMS Signatures, Why They Deny Commission Recovery, and How Interest Rates Are Limited

The consumer lending market in Ukraine has significantly changed over the past few years. Classic bank loans have been replaced by quick "payday loans" in electronic form, and claims are massively transferred to factoring companies. Today, debt recovery under a credit agreement is a complex process involving verification of the legality of electronic signatures, the authority of the new creditor, and compliance with social guarantees introduced by the legislator.

The "Judicial and Legal Newspaper" analyzed 19 of the latest court decisions involving banks and other financial institutions. The analysis shows that courts increasingly scrutinize whether the borrower actually received the funds, whether the interest was lawfully charged, whether the creditor included illegal commissions in the claims, whether it is lawful to demand penalties during martial law, and even whether the electronic signature was properly executed.

Martial Law: Penalties and Fines Are Practically Non-Enforceable

The most stable trend in judicial practice is the application of paragraph 18 of the Final and Transitional Provisions of the Civil Code of Ukraine.

Courts hold that during martial law, creditors have no right to collect penalties for delayed fulfillment of credit obligations. This concerns not only penalties or fines in the classical sense.

In some cases, courts also refuse to recover 3% annual interest and other sanctions that have the nature of liability for breach of monetary obligation.

For example, in case No. 754/2689/26, the court recovered only the principal debt and interest but completely denied the penalty recovery.

The debt collection agency demanded UAH 20,900, of which UAH 10,000 was a penalty.

The court applied paragraph 18 of the Final and Transitional Provisions of the Civil Code of Ukraine. Since the contract was concluded in June 2025, any penalties (fines, penalties) and other payments provided for by the respective contracts, accrued from February 24, 2022, for delayed performance, must be written off by the creditor.

As a result, only the principal, interest, and commission (UAH 10,900) were recovered; the UAH 10,000 penalty was fully denied.

A similar approach was applied by the Shevchenkivskyi District Court of Kyiv in case No. 761/47646/25, where the bank failed to recover even a small penalty of UAH 450.

The court noted that even small penalty amounts accrued after February 24, 2022, for delayed performance of credit obligations contradict the legislation in force during martial law.

Consequently, the bank’s claims were only partially satisfied: the court refused to recover the penalty, recognizing its accrual as unlawful.

The Zlatopil City District Court went even further in case No. 632/1062/26, recognizing that even 3% annual interest falls under the martial law relief. The financial institution demanded UAH 7,150 interest on a UAH 3,000 loan.

The creditor charged "contractual" interest for 117 days, although the contract term was only 30 days. According to the position of the Grand Chamber of the Supreme Court (case No. 444/9519/12), after the expiration of the loan term, the right to charge contractual interest ceases. Only the provisions of Article 625 of the Civil Code of Ukraine apply thereafter. This position has been repeatedly confirmed by the Supreme Court.

Online Loans: One SMS Code Is No Longer Enough

Despite the common belief that an electronic credit agreement is practically impossible to challenge, practice shows the opposite. Courts recognize agreements signed with a one-time identifier (SMS code) as fully lawful.

However, this alone is no longer sufficient for the creditor to win.

The financial company must prove that the defendant underwent identification, used the personal account, and that the funds were actually credited to his bank card.

In case No. 753/24583/25, such evidence was a bank statement confirming the crediting of UAH 8,000 to the defendant’s card account.

A similar approach was applied in case No. 159/700/26. The borrower denied the fact of concluding the agreement online.

However, the court noted that the agreement was concluded through the "Personal Account" using a one-time identifier. This is equated to a written form according to the Law "On Electronic Commerce".

As a result, the financial company’s claim was satisfied because the person’s verification was proven.

Meanwhile, in case No. 754/2153/26, the court explicitly stated that the transfer of UAH 5,000 to the borrower’s card was confirmed by a letter from the financial institution. No payment order, creditor’s account statement, receipt, or other primary banking document was mentioned in the decision.

Despite this, the court recognized the fact of credit provision as proven. The reason is obvious: the defendant did not appear, did not submit a response, and did not dispute the receipt of money in any way. In such a situation, the court decided the case based on the available written materials (part 8 of Article 178 of the Civil Procedure Code of Ukraine) and issued a default judgment.

"1% Rule": Courts Have Begun Massively Recalculating Interest

One of the most important changes in recent years is the legislative limitation of the maximum daily interest rate. After amendments to the Law of Ukraine "On Consumer Lending," the maximum daily rate cannot exceed 1%.

Anything above this is considered a null and void contract term. That is why courts increasingly recalculate the debt themselves.

An interesting case is No. 489/873/26. The Sumy Court of Appeal partially satisfied the collectors' appeal and recovered UAH 32,060 from the borrower, namely the principal and interest. The first instance court fully denied the claim, considering the evidence insufficient. The appeal disagreed because the payment order is proper evidence of fund issuance, and the defendant did not refute the fact of receipt. At the same time, the court denied the UAH 1,330 commission as null and void.

The first instance court believed the plaintiff did not prove the conclusion of the electronic agreement, proper borrower identification, receipt of funds by the defendant, and correctness of interest calculation.

The first instance court considered a copy of the agreement, consumer credit passport, calculation, and debtor registry extract insufficient evidence. The court especially emphasized the absence of "primary accounting documents."

The appellate court disagreed, noting that the payment order with the payment purpose "Funds according to contract 101652186" is proper and sufficient evidence of the transfer of UAH 7,000.

The defendant did not submit a response or provide any evidence that he did not receive the money. According to the position of the Grand Chamber of the Supreme Court in case No. 129/1033/13 and Article 1051 of the Civil Code of Ukraine, the burden of proof in such a case lies with the borrower.

The UAH 1,330 commission was denied on another ground. Referring to the resolution of the United Chamber of the Commercial Cassation Court of the Supreme Court dated 06.11.2023 in case No. 204/224/21, the panel noted: if the contract does not specify for which additional or related services the commission is established, such a provision is null and void under the Law "On Consumer Lending."

Interest After the Loan Term Ends: Another Reason to Reduce Debt

One of the most common creditor mistakes remains charging contractual interest after the loan term has expired.

The Grand Chamber of the Supreme Court in case No. 444/9519/12 established the legal position: after the expiration of the credit agreement term, the right to charge contractual interest ceases.

After that, only the consequences of delay provided by law may apply, unless special martial law provisions prevent this.

That is why in case No. 632/1062/26, the court recovered only UAH 720 out of over UAH 7,000 claimed interest. The rest, over UAH 6,000, was charged after the loan term ended, so the court recognized such claims as unlawful.

Debts of the Deceased: Heirs Are Responsible Only Within the Inheritance

A separate practice area concerns inheritance credit disputes.

The Supreme Court in case No. 295/7551/22 confirmed an important principle: heirs are not jointly liable for the deceased’s debts.

Each is responsible only proportionally to their inherited share and only within the value of the inherited property. The court annulled a decision on joint recovery of over UAH 11.9 million (equivalent to USD 437,645) from the widow and children of the deceased borrower at the bank’s claim and sent the case for reconsideration.

The court emphasized that according to Article 1282 of the Civil Code of Ukraine, heirs are liable for the testator’s debts personally and proportionally to their share in the inheritance, not jointly. The law does not provide for joint liability of heirs in such disputes.

Additionally, creditors should remember about deadlines.

In case No. 206/1169/24, the court checked whether the bank missed the six-month period to present claims to heirs after the borrower’s death.

The Supreme Court upheld the decisions of lower courts and denied the heirs' claim to recognize the credit obligation and mortgage terminated after the borrower’s death. The Civil Cassation Court panel confirmed: the borrower’s death does not terminate either the loan or the mortgage. Obligations are part of the inheritance, and the period for the creditor to present claims begins from the moment the heirs receive certificates of inheritance rights.

The borrower died in 2015. The bank learned of the death the same year but did not present claims to the heirs within six months. The heirs only received inheritance certificates in 2024. After that, the bank sent them demands for debt repayment. The heirs filed a lawsuit to recognize the obligations under the loan and mortgage terminated and to cancel encumbrance records in the State Register of Property Rights.

The heirs' claims were denied because the borrower’s death does not terminate the credit obligation. The credit obligation is not inseparably linked to the borrower’s person. It is part of the inheritance and passes to the heirs (Articles 1216, 1218, 1282 of the Civil Code of Ukraine).

The mortgage also does not terminate upon the mortgagor’s death. Grounds for mortgage termination are explicitly listed in Article 17 of the Law "On Mortgage." Mortgagor’s death is not among them. The mortgage remains valid for heirs as well (Article 23 of the Law "On Mortgage").

Regarding the creditor’s claim period, paragraph two of Article 1281 of the Civil Code of Ukraine links the start of the six-month period to the moment the heirs receive the inheritance certificate. The absence of the certificate at the time of death does not terminate the creditor’s right to claim.

Commissions for "Service": Courts Increasingly Recognize Them as Illegal

Another trend is courts' critical attitude toward various commissions. If a bank or financial company cannot explain which specific additional service the fees are charged for, courts recognize such payments as null and void. Actions performed by the creditor in their own interest cannot be separately charged.

That is why in cases No. 755/8126/26 and No. 489/7954/25, courts fully denied recovery of the respective commissions.

In case No. 755/8126/26, the Dnipro District Court of Kyiv denied a financial group the commission recovery. The court noted that the plaintiff did not prove which additional services were provided for this fee. Moreover, credit management and providing information about debt status, including once a month, according to Article 11 of the Law of Ukraine "On Consumer Lending," must be free of charge. As a result, the court recognized the commission clause as null and void and denied its recovery.

The Sumy Court of Appeal took a similar position in case No. 489/7954/25. The court denied commission recovery because the credit agreement did not contain a specific list of services for which it was charged. The lack of clear definition of the commission’s content was grounds for concluding its unreasonableness.

These decisions confirm judicial practice: the creditor must clearly define and prove which additional services the commission is charged for. If its content is not specified or the fee is effectively established for actions that by law should be free, courts refuse to recover it.

Procedural Issues and Attorney’s Fees

One should not automatically agree with the debt amount stated in the claim. A detailed analysis of the calculation often allows reducing the creditor’s claims several times.

If the claim is filed by a factoring or collection company, the borrower has the right to file a counterclaim against the new creditor. This approach is confirmed by the Supreme Court in case No. 201/8855/25.

The Supreme Court confirmed the legality of a counterclaim against collectors: this allows challenging credit agreement terms even if it was concluded by another creditor.

The new creditor filed a claim to recover over UAH 31,000 of debt under a credit agreement concluded in 2020.

The borrower filed a counterclaim asking to invalidate the contract terms related to interest rates, apply the consequences of their invalidity in resolving the original claim, recover a significantly smaller amount, and deny collectors' reimbursement of legal assistance costs.

The Supreme Court pointed out that in a dispute over debt recovery, the proper defendant in a counterclaim is the one who currently holds the right to claim. The decisive factor is not with whom the contract was originally concluded but who is now the creditor and presents claims in court.

This approach was already formulated in the Supreme Court’s ruling dated October 9, 2024, in case No. 582/202/22.

The court emphasized that the concepts of "party to the dispute" and "party to the process" are not always identical. The proper defendant is the person against whom the plaintiff’s violated right can be protected, in this case, the borrower defending against recovery.

As a result, the Supreme Court canceled the first instance ruling and the appellate court decision and sent the case for further consideration.

Moreover, courts are increasingly critical of creditors' expenses for professional legal assistance. If the case is typical, the claimed UAH 10,000–15,000 may be reduced. This happened in case No. 579/344/26, where compensation was reduced from UAH 10,000 to UAH 1,000. The Sumy Court of Appeal referred to parts 4 and 5 of Article 137 of the Civil Procedure Code of Ukraine and applied criteria of proportionality to case complexity, volume of work performed, time spent by the lawyer, and claim value.

The mere fact that the parties agreed on a high fee in the lawyer’s contract does not oblige the court to impose this amount on the defendant in full.

When the Bank Loses the Right to Recover Debt Due to Expiry of the Limitation Period

Judicial practice shows that the decisive factor in credit disputes is not only the contract date but also the parties' actions that may interrupt or alter the limitation period.

In case No. 464/9973/14-c, the Supreme Court denied the bank’s claim to recover debt under a loan issued in 2008. The court found that in 2009 the bank filed a claim for early recovery of the entire debt, effectively changing the main obligation’s performance term. From that moment, the three-year limitation period began. The subsequent court filing in 2014 occurred after the statutory period expired, so the claim was denied.

Meanwhile, the Odesa Court of Appeal in case No. 511/987/25 reached the opposite conclusion under different circumstances. The court recovered UAH 203,962 under a 2012 loan agreement with the bank. The decisive factor was that the borrower made partial payments until the end of 2022, which interrupted the limitation period. The court also considered legislative peculiarities of calculating terms during martial law.

The Court Confirmed the Possibility of Assigning Future Claims under a Factoring Agreement

The Poltava Court of Appeal in case No. 554/11937/25 confirmed the legality of assigning not only existing debt but also future monetary claims under a factoring agreement.

The court noted that such claims may be the subject of a factoring agreement provided they are properly individualized in the relevant registers. Following the review, the financial institution’s claim was satisfied, and the assignment of the claim was recognized as lawful.

The analyzed decisions indicate a qualitative change in courts' approaches to credit disputes. Whereas previously the main issue was only the existence of a credit agreement, today courts examine all aspects of legal relations—from proper borrower identification and confirmation of fund issuance to the legality of each component of the claimed debt.

Today, an active procedural position of the borrower, timely submission of a response, verification of debt calculation, and reference to current Supreme Court practice can significantly reduce the recovery amount.

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