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CJEU Joined Cases C-96/16 and C-94/16 / Opinion

Banco Santander SA v Mahamadou Demba and Mercedes Godoy Bonet and Rafael Ramón Escobedo Cortés v Banco de Sabadell SA
Policy area
Consumers
Deciding body type
Court of Justice of the European Union
Deciding body
Advocate General
Type
Opinion
Decision date
22/03/2018
ECLI (European case law identifier)
ECLI:EU:C:2018:216

Carta de los Derechos Fundamentales de la Unión Europea

Title IV: Solidarity

Article 38 - Consumer protection

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  • CJEU Joined Cases C-96/16 and C-94/16 / Opinion

    Key facts of the case:

    Reference for a preliminary ruling — Directive 93/13/EEC — Unfair terms — Scope — Assignment of debts — Loan agreement concluded with a consumer — Criteria for assessing the unfairness of a contractual term setting the default interest rate — Consequences of that unfairness.

    Outcome of the case:

    In view of the foregoing considerations, I propose that the Court give the following answers to the questions referred for a preliminary ruling:

    I. In Case C‑96/16, referred by the Juzgado de Primera Instancia No 38 de Barcelona (Court of First Instance No 38, Barcelona, Spain):

    (1) Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts does not preclude a business practice of assigning or purchasing debts, as described in the present case, without offering the consumer the opportunity to extinguish the debt by paying the price of the assignment, as well as interest, expenses and costs, to the assignee.

    (2) Article 6(1) and Article 7(1) of Directive 93/13 do not preclude national case-law which establishes as an unequivocal criterion the fact that, in loan agreements concluded with consumers, a non-negotiated term which sets a rate of default interest that exceeds by more than two percentage points the agreed rate of ordinary interest is unfair in so far as:

    • it does not restrict the discretion of a national court with regard to a finding of unfairness in respect of terms of a loan agreement concluded between a consumer and a seller or supplier that do not meet that criterion, and
    • it does not prevent that court from setting aside such a term should it find the term to be ‘unfair’, within the meaning of Article 3(1) of that directive.

    (3) Article 6(1) and Article 7(1) of Directive 93/13 do not preclude –– following a finding, in accordance with the case-law mentioned above, of unfairness of a term in a loan agreement setting a rate of default interest that exceeds by more than two percentage points the agreed rate of ordinary interest –– the term setting the rate of ordinary interest from continuing to apply until the debt is repaid in full.

    II. In Case C‑94/17, referred by the Tribunal Supremo (Supreme Court, Spain):

    (1) Article 6(1) and Article 7(1) of Directive 93/13 do not preclude national case-law which establishes as an unequivocal criterion the fact that, in loan agreements concluded with consumers, a non-negotiated term which sets a rate of default interest that exceeds by more than two percentage points the agreed rate of ordinary interest is unfair in so far as:

    • it does not restrict the discretion of a national court with regard to a finding of unfairness in respect of terms of a loan agreement concluded between a consumer and a seller or supplier that do not meet that criterion, and
    • it does not prevent that court from setting aside such a term should it find the term to be ‘unfair’, within the meaning of Article 3(1) of that directive.

    (2) Article 6(1) and Article 7(1) of Directive 93/13 do not preclude –– following a finding, in accordance with the case-law mentioned above, of unfairness of a term in a loan agreement setting a rate of default interest that exceeds by more than two percentage points the agreed rate of ordinary interest –– the term setting the rate of ordinary interest from continuing to apply until the debt repaid in full.

    (3) There is no need to answer the third question.

  • Paragraphs referring to EU Charter

    2) In that context, the Juzgado de Primera Instancia No 38 de Barcelona (Court of First Instance No 38, Barcelona, Spain) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

    ‘(1) (a) Does the business practice of assigning or purchasing debts without offering the consumer the opportunity to extinguish the debt by paying the price, interest, expenses and costs of the proceedings to the assignee comply with EU law, and specifically with Article 38 of the [Charter of Fundamental Rights of the European Union] … and Articles 4(2), 12 and 169(1) TFEU?

    (b) Is that business practice of purchasing a consumer’s debt for a negligible price without his consent or knowledge, without including that practice as a general condition or unfair term imposed in the agreement, and without giving the consumer the opportunity to participate in that operation by purchasing and thus extinguishing the debt, compatible with the principles laid down in Directive [93/13] and, by extension, with the principle of effectiveness and with [Article] 3(1) and [Article] 7(1) of that directive?

    (2) (a) For the purpose of safeguarding the protection of consumers and users and the Community case-law which develops it, is it in accordance with EU law, Directive 93/13, and in particular Article 6(1) and Article 7(1) thereof, to establish as an unequivocal criterion that, in unsecured loan agreements concluded with consumers, a non-negotiated term which sets a rate of default interest that exceeds by more than two percentage points the basic contract rate of interest (“ordinary interest”) is unfair?

    (b) For the purpose of safeguarding the protection of consumers and users and the Community case-law which develops it, is it in accordance with EU law, Directive 93/13, and in particular Article 6(1) and Article 7(1) thereof, to establish, as a consequence, that ordinary interest will continue to accrue until the debt has been paid in full?’