those affected by mortgages can request higher compensation

Brussels, Feb 16 (EFE) , which instead denies this right to banks.

The lawyer’s conclusions – which are not binding for the future ruling but in most cases mark the direction of the final ruling – argue that this is possible because the purpose of Community legislation is “to grant a high level of protection to consumers” and, furthermore, it can “dissuade” banks from signing these contracts.

The matter concerns two Polish citizens who signed a mortgage with a Polish bank to build a house that was denominated and disbursed in Polish zlotys, but was indexed in Swiss francs.

The clients sued their bank for understanding that the clauses of the mortgage contract were abusive in the sense that the installments that were received by the bank “without any legal or contractual basis”, as well as that the entity had profited from them.

Those affected understood that this fact implied the nullity of the contract and claimed compensation for having used their money without a contractual basis, but also for losing the possibility of obtaining income due to the “temporary inability” to use their own money and for the reduction of the purchasing power of the resources it had transferred to the bank.

In his conclusions, General Counsel Anthony Michael Collins responds to the doubts of the Warsaw-Śródmieście District Court that the Community legislation “does not conflict with national legislative provisions that allow the consumer to exercise claims that go beyond the reimbursement of the loan disbursed (…) and the payment of default interest at the legal rate accrued from the date of the payment request”.

Even so, it adds that it is up to the Polish court to verify whether its national law gives consumers affected by abusive mortgage clauses the right to exercise “this type of claim” and, if so, to “pronounce on its origin”.

The lawyer argues that a clause that has been declared abusive “does not produce binding effects on the consumer” and, therefore, the client “must see reestablished the factual and legal situation in which he would find himself if said clause had not existed” .

In addition, it underlines that the fact that those affected can claim compensation for an amount greater than the amount of the loan “may constitute an incentive for borrowers to exercise the rights conferred on them by the Directive, while dissuading banks from introducing clauses abusive in their contracts.

Regarding the possibility that banks can exercise “similar claims” against consumers, “the general counsel denies this right to financial institutions because the nullity of the contract is a consequence of the fact that the bank included an abusive clause in that contract” and “a professional should not derive any financial benefit from a situation created by his own wrongful conduct.” EFE

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(More information on the European Union at euroefe.euractiv.es)