Three recent court sentences have ruled that revolving cards contracts be declared null and void because of their lack of transparency. All three open an alternative legal route for all clients with revolving cards whose interest rates are not particularly high.
Lack of legality in revolving cards contracts
As followers of the Costaluz Lawyers blog know, revolving cards contracts have received several legal blows over the last couple of years, reenforcing consumer rights. The latest court rulings confirm this trend.
Not enough transparency in contracts
Of the three most recent, we’d like the highlight the sentence at the Provincial Court in Pontevedra, Galicia. In this instance, the lawyer had alleged usury and lack of transparency. His client had already lost his first case against Banco Cetelem for a revolving card with an interest rate of 19.55%.
While the court rejected the case for usury, it ruled that a lack of transparency did exist. The client received no information on the characteristics of the contract when he signed it.
“When it comes to contracts for credit, financial institutions must give borrowers enough information to allow them to make wise and considered decisions,” said the sentence.
Find out how to reclaim interest paid on revolving cards in Spain
A repayment system is key
For the judges involved in the sentence, the real key to revolving cards cases lies in “their repayment systems”. In most instances, the consumer does not receive information about how they will repay the loan.
The legal experts state that the revolving card contract, in this case, can be considered abusive because it does not provide correct information to the user. Specifically, the regulations regarding the repayment system and how the debt can be satisfied on a regular basis.
The judges, therefore, conclude that there is a legal and financial imbalance against the consumer. In addition, this inequity can also seriously exacerbate the client’s financial situation.
Final ruling
In their sentence, the judges highlighted that the revolving card contract has not passed the transparency control. They also point out that the contract with Banco Cetelem does not hold up without the clause referring to the remunerative interest. As a result, the sentence rules in favour of the consumer and declares the contract null and void. Banco Cetelem was also sentenced to pay the court charges of the first case.
Our thoughts
At Costaluz Lawyers, we applaud the latest court sentence, which reiterates our firm conviction that all contracts must comply with transparency control. We have seen time and time again the lack of transparency in contracts for revolving cards and believe this latest sentence makes it easier for the consumer to reclaim their rights.
Our legal team offers help and advice on revolving cards contracts. If you are a victim of their unclear clauses and find your financial situation at risk, as a result, get in touch for a no-obligation chat.
Maria Luisa Castro
