A consumer who has taken out a loan denominated in a foreign currency and is unaware of the unfairness of a clause included in his contract cannot be exposed to any limitation period for the return of sums paid on the basis of this clause. This was the conclusion of the Court of Justice of the EU in two judgments delivered on Thursday 10 June, in case C-609/19 and in joined cases C-776/19 to C-782/19.
These cases concern consumers who have taken out mortgage contracts with BNP Paribas Personal Finance in Swiss francs that are repayable in euros. Their underwriting carried an uncapped exchange rate risk related to fluctuations in the euro against the Swiss franc, which, without being explicitly mentioned, was a risk for the consumer.
Following difficulties encountered by consumers in paying the instalments, legal proceedings have been initiated before two French courts to determine whether the terms of these contracts are unfair, within the meaning of the EU Directive on unfair terms in consumer contracts. To this end, they have referred a series of questions to the Court on the interpretation of the Directive.
In its judgments, the Court recalls that unfair terms in a consumer contract are not binding on the consumer and must be regarded as never having existed. Therefore, it considers that a claim by the consumer to challenge the unfairness of a term cannot be subject to any limitation period.
That being said, the Court emphasised that the Directive does not preclude national legislation which subjects an action for the restitutionary effects of such a finding to a limitation period.
However, it notes that a limitation period for the recovery of sums paid on the basis of an unfair term, which may have expired even before the consumer could have been aware of the unfair nature of that term, cannot in any way be compatible with the Directive.
The Court also concluded that the information provided by the creditor to the consumer on the existence of the exchange risk does not satisfy the transparency requirement of the Directive if it is based on the assumption that the parity between the currency of account and the currency of payment will remain stable throughout the term of the contract.
See the judgment in case C-609/19: https://bit.ly/3pD2aae and the judgment in joined cases C-776/19 to C-782/19: https://bit.ly/3ivTb9j (Original version in French by Marion Fontana)