In a verdict released several days ago, the Chamber of civil matters of the High Court partially admits the appeal filed by the Spanish Organization of consumers and users (OCU) against the decision of the provincial court of Madrid who had declared as valid several reported clauses in the year 2005.
Amongst the clauses now voided by the Supreme Court are the ones that exclusively penalised the owners of credit or debit cards for the damage carried by its fraudulent misuse as long as those circumstances were not communicated to the bank. The verdict establishes that “the existence of a loss or theft must be communicated without undue delay since the disappearance is known”.
However, the verdict declares that “clauses totally exempting the Bank of liability indiscriminately and without nuance or modulation are abusive” and “disproportionate”, since “there are very frequent cases where the bank’s diligence warned about undue uses and even warned users, who were unaware”.
The Court situates on the same line those clauses that exclude “whatever the case” the responsibility of the bank when the PIN or card password is obtained by coercion or force majeure.
Magistrates insist that “is noteworthy that, in certain circumstances, banks can warn undue uses using the diligence which from them is enforceable in harmony with their experience and technical resources”.
Pretext to rescind the contract
In thye paragraph about mortgages, the magistrates declared abusive those clauses prohibiting the leasing of mortgaged estates, even though they admit such deeds can decrease the value of the property. Therefore they argue that these clauses should establish how much rent must the owner demand in order to correct the “decreasing value” the lease may cause the bank in the case of non-payment of the loan and of need to repossess the property.
The Supreme Court also rejects that banks include contract clauses regarding the resignation of customers receiving a mortgage or other loans about being informed of these being transferred to another bank or entity. “Its unfairness is unquestionable” because “it implies a waiver or limitation of the rights of the consumer”, the judgment argues.
Another voided condition in the loans paragraph it the one allowing Banco Santander to compensate receivables from clients with those positive balances held in other products, even if they were not their only holders. The Supreme Court understands that this type of clause is valid only if they are “transparent, clear, concrete and simple”, conditions that the wording of the clause of Banco Santander was not meeting.
The Court also termed as “illicit” the power of a bank to resolve in advance term-granted loans when an embargo of the borrower’s assets occurs or his solvency is diminished by any cause.
In this regard, judges believe that this condition is looking for “any negative impact on the borrower’s heritage, actual or potential, can serve as an excuse” to have the contract early terminated, thus ”giving the financial institution a discretionary and disproportionate power (…)”.
Judge Baltasar Garzón will have to confront the penal process of prevarication in the Spanish Supreme Court. The Tribunal’s second court-room has decided to begin prosecution based on a complaint in which the famous “star judge” is accused of an obvious crime of prevarication “premeditated, conscious and believing to be not blameworthy for them”, because of his actions as a judge in the process he initiated about the disappearance of people during the Spanish civil war and General Franco’s political regime. The surprising decision of the Penal Room of the Supreme Court had been taken by its president, Juan Saavedra and the magistrates Adolph Prego, Joaquin Giménez, Francisco Monterde and Juan Ramon Berdugo. The resolution was unanimous. Subject of multiple accusations, Garzón so far has been cleared of them all and regarding this latest, filed the past 26th January by the so called Clean Hands Union, there was initially a favourable report in Garzon’s favour from the office of the Supreme Court public prosecutor that, as it has been habitual, exonerated Garzon.
The verdict concludes that to include a person “in a registry of bad debtors without credibility is an illegitimate attack against one’s reputation since such an accusation of being a defaulting debtor harms the dignity of the person, injures his reputation and impairs the person’s own estimation”. The courts will from now on be able to force banks and companies to compensate the client harmed in cases where third parties are able to access the “false dilatoriness” as this causes “economic consequences to him”, such as the refusal of credits or mortgages.
The verdict confirms a resolution dictated 3rd April by the full session of the First Room of the Spanish Supreme Court and establishes Jurisprudence on the matter.
The verdict dismisses the appeal filed by the bank BBVA against the verdict dictated on December 13th 2001 by the number three Court of First Instance in Tenerife, which gave reason to one client, whose data was communicated to the registries of bad debtors Badex and Asnef-Equifax, after she refused to pay 1,051 Euros charged illegally to her account. The sentence of Tenerife’s court ordered BBVA to pay the plaintiff an indemnity for moral damages of 18,030 Euros plus the legal costs derived from the procedure and to urge the withdrawal of the data made available to the registries of bad debtors. The bank supposedly debited 1,051Euros from the account of the client through her Visa-Classic card. The client asked the bank for the cancellation of the debit on various occasions via telephone, a branch of the bank and through the defender of the client and later issued a charge to the Bank of Spain through the national police. The court dismissed the allegations made by BBVA who claimed that the client was on the bad debtor’s list for only twelve days during which nobody consulted her records. The judge considered that access to the records of the bank and both registries of patrimonial solvency were sufficient to prove damage to her reputation.