The Court of Justice of the European Union has ruled against banks charging interest on loan commissions and fees never received by consumers.
Breakthrough for Borrowers
The Court of Justice of the European Union has decisively resolved a long-standing and controversial dispute for thousands of borrowers. The issue concerns the charging of interest not only on the actual loan amount but also on commissions and additional costs – money the consumer never actually received.
Banks treated these amounts as part of the capital and calculated interest based on this, a practice now deemed unlawful.
EU Law Violated
The TSUE states directly that this practice violates European Union law and is inconsistent with the consumer credit directive.
Impact on ‘Free Loan’ Sanctions
This is a key change for individuals seeking the so-called ‘free loan’ sanction. Previously, Polish case law was inconsistent, and cases dragged on for years. This ruling provides consumers with a strong argument in disputes with banks and may significantly impact ongoing proceedings, including those before the Supreme Court.
Financial Implications
In practice, this means banks may face serious problems, while borrowers have a real chance of recovering funds.
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