credit cards Spain excessive interest rates

A recent court sentence further champions consumers’ rights in the fight against abusive interest on revolving credit cards.

The latest ruling has declared a Wizink card sold to a vulture fund null and void. The judge has ordered the fund to reimburse the consumer and pay costs.

The latest case

Revolving credit card cases are commonplace, particularly when it comes to claims from funds against consumers. However, the latest ruling was brought to court by the consumer rather than the credit card owner.

The consumer-owned a Wizink credit card that Wizink subsequently sold to Hoist Finance Spain, a so-called vulture fund. The fund claimed the amount of €3,309 from the consumer due for payment and interest for purchases made using the card.

The consumer took the case to court in Galicia, northern Spain. The court has ruled that the credit card conditions are null and void and that the interest rate (26.892%) is abusive.

The sentence exonerates the consumer from all financial obligation and condemns Hoist Finance Spain to pay €1,865.17 to the consumer plus costs.

General Conditions of Revolving Credit Cards

The first part of the sentence focuses on the general conditions of the revolving credit card. The judge highlights that both European and Spanish law distinguishes between control of the document’s contents and control of transparency. She also reiterates the sentence issued by the Spanish Supreme Court on the need for transparency in May 2013.

The first control refers to the general conditions of the contract and the consumer’s overall understanding of them, their legibility and grammatical form. The second refers to the consumer’s full understanding of the financial and legal implications included in the conditions.

Find out more about how to claim back interest on revolving credit cards in Spain

Conditions Declared Null And Void

In this particular case, the judge noted that the first control (contents of the documents) was fulfilled by the clauses on the back of the form. However, she underlined the fact that the print was “impossible to read” even when magnified.

In the second control, the judge said it was “not possible to access the content outlining the rules that determine the variables applied at the end of the month and therefore the final amount payable”. She also said that it was impossible to know when the consumer was informed of the amount or if they understand the financial implications.

The illegibility of the conditions plus the lack of transparency led the judge to declare the credit card conditions null and void.

Abusive Interest Rate

In her sentence, the judge also emphasised the abusive nature of the interest rate charged on the credit card. In this particular case, Wizink applied a rate of 26.82%.

The judge called this “outrageous” and pointed out that the highest applicable rate at the moment is 21.15%.

Victory for consumers

While the recent sentence can be appealed, at Costaluz Lawyers, we believe it represents another victory for consumers. Not only does it force a fund to compensate a consumer for abusive interest rates, it further champions the cause for transparent documentation.

All too often, consumers find themselves trapped into an agreement – a mortgage loan or credit card contract, for example – that includes clauses whose meaning is ambivalent or unclear. These clauses usually benefit the other party (bank or credit card provider) and work against the consumer. The latest sentence, therefore, is cause for celebration.

If you believe you are a victim of abusive clauses in the contract, get in touch for a free consultation. We are only too happy to help.

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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