Do you have a revolving card? Have you been paying interest on said card? The interests stipulated by your bank can be abusive. A&O Abogados, your civil lawyers in Spain, exposes you the keys to said claim.

First of all, it is essential to know what the revolving card consists of. The use of the card subscribed with the entity implies the possibility for the user to periodically pay the amount of the purchases (by means of a percentage of the amount disposed or a fixed monthly amount), in such a way that the entity accredits purchases of consumer goods for their return plus term interest, operating as a consumer credit.

Let’s see it with an example. A man, Andrés Ortega, signs a card with the bank with which he makes his monthly purchases. The entity credits a monthly amount to the user that will be paid in installments during the following months with an interest rate. Let’s imagine that the borrower has 2000 euros. With his purchases for the month he consumes 1500 euros of that balance. Thus, during said month he can only have 500 euros. At the beginning of the following month, the user must repay the entity the agreed amount. In addition, the entity will receive interest for the amount disposed (1500 x TAE).

In this type of contracts, the entity usually credits the user again at the beginning of the following month, applying said credit to satisfy the amount not paid from the previous month. In our example, Andrés will have to pay interest again for the amount provided (even though he has not provided it), that is, for 1000 euros plus the APR, receiving interest that WILL INCREASE THE DEBIT BALANCE to the entity until the user injects assets into the check.

In conclusion, Andrés will enter a spiral of a new accredited balance-allocation of payment to a previous debt-accrual of interest that will increase on a monthly basis.

On what basis is the revolving card claim based?

The aforementioned should be taken into consideration: this banking legal business works as a consumer credit. Consequently, due to its purpose, it is held with consumers, the protection regulations for consumers and users being applicable. Consider that they are contracts where the user does not have the negotiating capacity, only manifesting his autonomy in the acceptance or rejection en bloc of the specifications predisposed by the entity, configuring itself as an adhesion contract.

All of this means that said specification is susceptible to abuse control both due to the incorporation and the transparency of the conditions included in it.

What is the interest rate claim centered on?

The action focuses on the application of what is known as the Azcárate Law, or law of the repression of usury of 1908. Said law states in its article 1 that

“Any loan contract that stipulates an interest notably higher than the normal rate of money and manifestly disproportionate to the circumstances of the case or under conditions such that it is leonine, there being reasons to believe that it has been accepted by the borrower because of their distressing situation, their inexperience or limited mental faculties.

The contract in which a greater amount is supposed to have been received than the amount actually delivered, whatever its entity and circumstances, will also be null and void. The waiver of jurisdiction, within the population, made by the debtor in this type of contract will also be void.

In application of the aforementioned law to the actions related to revolving cards, the Supreme Court has come to specify in the ruling of the plenary session 628/2015, of November 25, which creates by itself jurisprudence that can synthesize the requirements for the prosperity of the action taken with respect to these cards in relation to the interest rate in the following cases:

i) The regulations on abusive clauses in contracts concluded with consumers do not allow control of the “abusive” nature of the remunerative interest rate, while the clause establishing such interest regulates an essential element of the contract, such as the price of the service , as long as it meets the transparency requirement. The expression of the APR is an essential requirement, although not sufficient by itself, so that the clause that establishes the remunerative interest can be considered transparent.

ii) For the credit operation to be considered usurious, it is enough that the requirements set forth in the first paragraph of art. 1 of the Law for the Repression of Usury, that is, “that an interest notably higher than normal for money and manifestly disproportionate to the circumstances of the case be stipulated”, without it being required that, cumulatively, it be required “that it has been accepted by the borrower because of his distress, inexperience or limited mental faculties”.

iii) Given that according to art. 315, second paragraph, of the Commercial Code, “any benefit agreed upon in favor of the creditor shall be considered interest”, the percentage that must be taken into consideration to determine if the interest is notably higher than the normal amount of money is not nominal, but rather equivalent annual rate (TAE), which is calculated taking into account any payments that the borrower has to make to the lender for the loan, according to legally predetermined standards.

iv) To determine if the loan, credit or similar operation is usurious, the interest with which the comparison must be made is the “normal money”. To establish what is considered “normal interest”, the statistics published by the Bank of Spain can be used, based on the information that credit institutions must provide on a monthly basis on the interest rates applied to various types of active operations and passive. It is not correct to use as a term of comparison the legal interest of money.

v) The decision of the Provincial Court to consider as “not excessive” an interest that widely exceeded the index set in the instance as significant of the “normal interest of money” (the average rate of consumer loans) was not correct, since that the question was not so much whether this interest was excessive or not, as if it was “significantly higher than normal money and manifestly disproportionate to the circumstances of the case”, and such an important difference with respect to the average rate taken as a reference allows us to consider the interest stipulated as “significantly higher than normal for money.”

vi) The lender bears the burden of proving the concurrence of exceptional circumstances that justify the stipulation of interest significantly higher than normal in consumer credit operations.

vii) The risk derived from the high level of non-payments linked to consumer credit operations granted in an agile manner and without adequately verifying the borrower’s ability to pay cannot be considered as exceptional circumstances that justify a significantly higher interest than normal money. whereas the irresponsible granting of consumer loans at interest rates much higher than normal, which facilitates consumer over-indebtedness and results in those who regularly meet their obligations having to bear the consequences of the high level of defaults, cannot be protected by the legal system.

How can I claim against the bank?

Prior to the exercise of actions, a claim must be made to the bank to eliminate the clauses and claim the restitution effects consisting of the amounts improperly received and the interest on said amounts. The entity will have a period of two months to respond to said letter, after which the actions may be brought before the competent court.

At A&O Abogados, civil lawyers in Spain, we can help you claim against the bank. Do not hesitate, contact now.

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