Nullity of usurious interest on microloans, consumer loans and cards revolving
At JLCasajuana Abogados we are specialists in claims against microloan companies, consumer loans and revolving cards. We have obtained the annulment of several of these loans, significantly reducing the amount that the client must return to the financial institution. At the same time, if the client is included in a file of delinquents due to non-payment of any of the installments, it is possible that he can request a claim for moral and / or patrimonial damages.
What are Revolving Cards
Revolving cards, as is well known, are for practical purposes consumer credit. Through this product, financial institutions offer credit with a maximum limit that the client may have during a determined period of time, being able to use the remainder between the amount owed and the agreed credit limit at any time. In addition, the money can be returned without being subject to a settlement date, restoring the amount on your card, and payments will be made according to previously agreed installments to which remunerative interest will be applied.
The latter has given rise to a great deal of litigation and has been the subject of numerous rulings handed down by our courts, as the usurious nature of the type has been discussed at length TAE interest that is applied to the outstanding debt by the consumer and its nullity.
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Nullity of usurious loan contracts
To begin, let’s refer to what is established in the Law of July 23, 1908, on the Suppression of Usury in terms of interest on the loan contract, which, in its articles 1 and 3º determines that any loan contract that stipulates:
- A notably higher interest rate than normal for money
- An interest manifestly disproportionate to the circumstances of the case
- Has been accepted by the borrower because of his distress, his inexperience, or his limited mental faculties.
In its 3rd article it states that having declared the nullity of the contract:
“the borrower shall be obliged to deliver only the sum received; and if he had paid part of it and the interest due, the lender will return to the borrower what, taking into account the total amount received, exceeds the capital lent”
Sentences of the High Court
Thus, we find two judgments of the High Court in which a defined criterion is established about the disproportionality of interest according to the normal of money and according to the circumstances of the case:
“The Judgment of the Plenary of the Supreme Court of November 25, 2015, regarding an annulment action establishes that “the percentage that must be taken into consideration to determine if the interest is notably higher than the normal amount of money It is not the nominal, but the equivalent annual rate (TAE). The interest with which the comparison has to be made is the “normal of money”. It is not, therefore, a question of comparing it with the legal interest of money, but with the “normal or habitual” interest in concurrence with the circumstances of the case and the existing freedom in this matter”.
And continues:
“To establish what is considered ‘normal interest’, one can refer to the statistics published by the Bank of Spain, based on the information that credit institutions must provide on a monthly basis on the interest rates that apply to the different modalities of active and passive operations”.
It is understood that to establish what is the normal interest of money, it must be taken as a reference, within the statistics published by the Bank of Spain, the interest rate that corresponds to the credit operation that is most similar or offers the most similarities with respect to the one in question.
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Regarding the subjective requirement contained in article 1 of the Usury Law “that the loan has been accepted by the borrower because of his distressing situation, his inexperience or his limited mental faculties”; this same sentence of the year 2015 declares that it is not essential that he attend to be able to declare the usurious nature of the contract of a revolving card, it being enough only that the objective requirement takes place, that is, that an interest rate of notably superior to the normal rate of money has been established and its disproportion cannot be sustained in relation to the circumstances surrounding the contracting.
This criterion is contained not only in said Judgment of the year 2015 but also in the Judgment of the Supreme Court (Civil Chamber), dated March 4, 2020, in which declares the usurious nature of the interest set in a revolving credit contract because it is “significantly higher than normal money and manifestly disproportionate to the circumstances of the case“. Likewise, it consolidates and comes to complete an omission in the previous Judgment in relation to the interest with respect to which that of a revolving card must be compared to determine if it is higher than the normal amount of money, establishing the following in this regard:
“The average rate that is used for the comparison as “normal interest on money”, something above 20% per year, is already very high. The higher the index to be taken as a reference as “normal money interest”, the less margin there is to increase the price of the credit operation without incurring usury. If this criterion is not followed, it would be absurd that for a revolving credit operation to be considered usurious, since the interest rate is significantly higher than normal money and disproportionate to the circumstances of the case, the interest rate would have to be close to 50%. .”
And, concluding that:
“a percentage increase with respect to the average interest rate taken as «normal interest on money» of the concurrent proportions in this case, the average rate of credit operations of the same nature being already so high, determine the usurious nature of the credit operation”.
The Ruling of March 4, 2020 of the Supreme Court laid the foundations for a large number of lawsuits that have resulted in declarative judgments of nullity, for usury, of credit agreement revolving, such as, for example, the Judgment of March 17, 2021 of the Court of First Instance No. 4 of Madrid, in which a Wizink card contract was declared void as a user, in which case, the APR interest was 27.24% and:
“declaring that the plaintiff is only obliged to pay the principal drawn down and/or lent and ORDERING the defendant entity to repay, if applicable, the plaintiff any amounts that have been paid by it during the life of the credit card, for all concepts, that exceed the capital drawn down and/or lent, in accordance with the liquidation made in execution of the judgment, plus interest on the amount resulting from the date of filing the claim and up to the payment, with the increase provided by law from the date of this resolution.”
Or also the Judgment of March 22, 2021 of the First Instance Court No. 8 of Madrid, in which a Wizink card contract with the same interest was also declared null and void as a user APR than the previous case (27.24%) and in whose ruling it was declared:
“that the remunerative interests imposed on the plaintiff in the Bancopopular-e card contract (TIN 24% – APR 27.24%) are usurious, determining the nullity of the contract, condemning the defendant to return the amount that exceeds the capital provided, with its legal interests, with an express order of costs to the defendant.”
Finally, it is worth mentioning the entry into force on January 2, 2021 of the Ministerial Order of July 24, 2020 that arises from the aforementioned Judgment of our highest court of March 4, 2020, which established the guiding principles for the type of product at hand.
The main purpose of this Ministerial Order is to delimit, regulate and amend the faults of this type of consumer credit. Among other aspects, it establishes the obligation of the financier to inform the consumer about the method of payment and interest, to state clearly and transparently that it is a revolving credit, to establish whether the contract provides for the capitalization of overdue, demandable and unsatisfied amounts, and other information that is essential so that the consumer has full knowledge of what he is signing for, all prior to signing the contract.
The right of withdrawal by the card user is also provided, as well as the duty of the funder to provide the former with periodic information (amount of the credit provided, established payment method, borrowing rate, date on which the client will complete the payment of the arranged credit, among others).
In short, this Ministerial Order seeks to ensure greater transparency in this type of product, which is more than necessary since that the lack of this has been, to a large extent, the cause of the avalanche of claims for nullity of revolving credits that have taken place especially in the last year. However, there is still a long way to go, since as a result of the judgment of March 4, 2020 of the Supreme Court, there has been a confrontation with regard to these credits, which is palpable in numerous sentences issued of our courts.
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31/05/2021
