Citi Handlowy zloty loan agreement is not valid in court

The agreement relates to a cash loan granted in 2008 of about PLN 80,000. zlotys. The borrower, who also had a franc loan in mind, fell into financial trouble and stopped making the payments.

– The bank imposed a high penal interest, so that the part of the pension that the bailiff received did not allow the capital to be repaid, and the loan became de facto unpayable. Analysis of the contract showed that the provisions may be abusive, says Agnieszka Sobczyk, legal advisor at KL Legal Granat i Wspólnicy.

It is not known how the interest rate will change

In 2022, a court case was filed to deny a Bank Enforcement Deed (BTE) enforceability. It was claimed that the bank was unilaterally entitled, on the basis of a standard contract, to make changes to the interest rate in the loan agreement without clear and verifiable criteria. According to the records Citi Handlowy can change the interest rate depending on indicators such as: the interest rate on open market operations, inflation, and the bank’s interest financing cost ratio.. However, it was not a record in the form of a mathematical formula, but only a list of indicators, the change of which allowed the bank to change the interest rate. The contract did not include the WIBOR index.

– The bank was arbitrarily authorized to set the interest rate using unverifiable metrics, which overpaid obligations to the bank, making it additional income for the bank – says Agnieszka Sobczyk.

The verdict was delivered in December 2022 in the Wroclaw Krzykow District Court.

“I filed a lawsuit. The bank did not respond to the lawsuit. The court issued a judgment in absentia, considering the claims in the lawsuit plausible. The bank did not appeal the verdict and it became final – says Agnieszka Sobczyk.

Not the first such ruling

This is not the first time that a zloty loan has become invalid in court. Also in December, the District Court of Wrocław-Śródmieście decided that The loan agreement with Credit Agricole is not valid. The court determined that the WIBOR-based interest rate and change factor, the value of which the customer cannot determine, is an offensive and irreplaceable clause in the loan agreement. Therefore, the contract is not valid. This ruling is still not final and the bank has appealed.

This is a similar mechanism to cases of candor, where the exchange rate requirement is usually called into question. The inability to determine the criteria by which exchange rates are constructed in banks’ schedules has caused the courts to conclude that banks are free to shape these rates, making the clause offensive. And if it cannot be replaced by general provisions in the contract, the nullity of the contract must be declared from the moment it was concluded. The same claims can be applied, in some cases, to the principles of interest rate change or repayment.

All contracts with a variable price element must be examined. Anyone with banking products, especially if they are older, should check the contract, especially if what was promised at the stage of concluding the contract is not reflected in reality – says Agnieszka Sobczyk.

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