new laws spain

A provincial court in Spain has fined a bank €1,000 for forcing clients to go to court over mortgage clauses despite the bank knowing that the clients were right. The bank even called on the clients to pay the costs for the legal proceedings.

The court called the bank’s actions “fraudulent behaviour” and condemned its waste of public resources and time. The fine is designed to act as a deterrent so that other banks take note.

Forced court proceedings despite knowing clients were right

The clients who have a mortgage at the bank questioned certain clauses in their contract. The bank was fully aware that the clients were right – the Spanish Supreme Court had already ruled that such clauses are abusive and numerous cases have already resulted in refunds to clients from banks.

However, despite the bank’s knowledge of the law, the entity chose to disregard it and forced the clients to take their claim to court. To add insult to injury, the bank demanded that the clients pay the costs of the court proceedings.

Did you know? Costaluz Lawyers have years of experience in successfully claiming against abusive clauses in mortgage contracts in Spain. Find out how we can help you.

€1,000 fine to deter similar behaviour from Spanish banks

The Salamanca Court has condemned the bank’s action and stated that it is “manifestly reckless behaviour”. In a statement, the ruling highlighted two aspects in particular:

Harm and disservice to consumers – the ruling underlined the harm suffered by the bank’s clients. In particular, it highlighted “the worry and uncertainly” arising from a court case. In addition, the sentence pointed out “the inconvenience and waste of time” involved in having to take legal advice whether or not there were economic effects.

Waste of public time and money – the court also stated that the bank’s behaviour harmed general public interest because “it took scarce resources away from other claims and rights worth protecting in Spanish courts”.

Exemplary fine

For the Salamanca Court, this case required a fine that would act as a deterrent so that other banks would be dissuaded from taking a similar path. The judge, therefore, considered it reasonable to fine the bank the sum of €1,000.

Right course of action

Followers of the Costaluz Lawyers are well aware that we are strong defenders of consumer rights. We believe that this latest sentence is another step in the right direction in defending consumers against the abusive action of banks in Spain. We trust that it will lead to banks recognising that mortgage holders do have the right to claim against abusive clauses even with waivers.

In Spain, many homeowners have mortgage contracts with abusive clauses. For example, your monthly payments may be higher because of excessive interest charges. Or you may be entitled to a refund for costs paid by paid but that should have been met by the bank.

If you believe your mortgage contract contains abusive clauses, get in touch for a free consultation.  

María Luisa de Castro

DIRECTOR

María founded CostaLuz Lawyers in 2006 and is the Firm’s Director. María is registered Lawyer number 2745 of the Cadiz Bar Association and is licensed to practice in all areas of law throughout Spain. Working closely with her team, María has developed the firm into one of the most highly regarded and trusted Spanish Law Firms acting for English speaking clients with legal problems in Spain.

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