Unfair foreign currency conditional loan decision of the Court of Justice of the European Communities
The European Union (EU) court has ruled that in the event of termination of a foreign currency loan with abusive terms, consumers can claim compensation for amounts greater than the payments made to the bank.
The Court of Justice of the European Union, the highest legal authority in the EU, based in Luxembourg, has ruled the case brought against a bank in Poland on the results of the termination of the loan agreement and the calculation of compensation.
“EU law does not prevent consumers from claiming compensation beyond reimbursement of monthly installments paid by the bank in the event a home loan contract is terminated due to unfair conditions,” the decision said.
The court noted that the high amount of compensation in question would prevent the bank from imposing equally unfair contracts on consumers.
EXPECTED TO BRING FINANCIAL LOSSES TO BANKS
In 2008, a husband and wife signed a home loan agreement with a bank in Poland.
The monthly loan payments were indexed to Swiss francs. These terms were determined by converting the selling exchange rate of the Swiss franc in the exchange rate table of the bank in question on the loan payment date to the Polish zloty.
The couple, who thought that the conversion provisions that determined the exchange rate were unfair and that the factors in question invalidated the contract, took legal action in Poland against the bank.
The Polish court sought an opinion from the European Court of Justice on the unfair terms of the loan in question.
In recent years, due to low interest rates in Poland, purchases of mortgages in various foreign currencies, especially Swiss francs, have become widespread.
Those who used these loans were negatively affected by the rise of the Swiss franc against the zloty and the rise in interest rates.
The final decision of the EU court is expected to directly affect Poles who use foreign currency loans with unfair conditions and the Polish banks issuing the loans and impose a significant financial burden on Polish banks. (AA)