In a judgment handed down on Thursday 13 February (Case C-472/23), the Court of Justice of the European Union (CJEU) ruled that a bank may be deprived of its right to interest if it fails to fulfil its duty to provide information to a consumer when concluding a consumer credit agreement.
In Poland, a debt collection company acting on behalf of a consumer claimed that the bank which had concluded a credit agreement with the consumer failed in its duty to provide information, thereby infringing Directive 2008/48/EC on credit agreements for consumers.
According to the company, the annual percentage rate of charge (APRC) was overstated. In its view, one of the clauses in the contract - i.e. the possibility of calculating interest on the cost of credit in addition to the interest charged on the sum paid to the borrower - which was taken into account in calculating this rate is unfair and not binding on the consumer.
In addition, the contract does not clearly specify the reasons and procedures for increasing the costs associated with its performance. In particular, fees and commissions could be increased if at least one of the conditions occurs (e.g. change in the minimum wage, change in the level of indicators published by Poland’s Central Statistics Office, revision of the tax and/or accounting rules applied by the bank), where the materialisation of one of these conditions impacts the costs borne by the bank for performing the consumer contract.
Referred to the Court for a preliminary ruling, the Court points out that the credit agreement must clearly and concisely state the APRC calculated at the time of conclusion. However, it considers the fact that a credit agreement mentions an APRC which turns out to be overestimated because certain clauses of the agreement are subsequently found to be unfair does not constitute, in itself, a breach of the creditor’s obligation to provide information.
According to the CJEU, the contract must describe, in a clear and comprehensible manner, the conditions under which the costs associated with its performance may be modified. The fact that the contract is based on indicators that are difficult to verify may breach the obligation to provide information. In the Court’s view, this is the case where an average consumer is unable to verify the occurrence of the circumstances justifying that change or their impact on those charges. It will be up to the Polish judge to examine whether that is the case in this instance.
Lastly, in the event the obligation to provide information affecting the consumer’s ability to appreciate the scope of his commitment is breached, the European court concludes that the bank may be deprived of the right to interest and costs.
See the judgment of the Court of Justice: https://aeur.eu/f/fhg (Original version in French by Mathieu Bion)