Loans and their unfavorable interest rate
Today, we are again discussing – recently popular – the topic of francs. In our last article, we wrote about the currency spread, which is often treated as an abusive clause, which makes it one of the main reasons for questioning foreign currency loan agreements. And the second category of prohibited clauses includes changing the interest rate on loans by banks, which we write about in today’s article.
Exercise of a privileged position
One of many prohibited clauses says that: “The change in interest rate may also occur in the event of a change in the financial parameters of the money and capital market in the country (or countries associated in the EU), whose currency is the basis for indexation.” or “(…) interest rates may change during the term of the contract.” Such provisions in contracts place banks in a very privileged position. They have the ability to freely control the interest rate, so their profits can increase significantly. They are imprecise and do not state the circumstances in which the bank will change interest rates. Despite the fact that these provisions have been considered abusive clauses, they are still used, because thanks to this banks are able to obtain more income. All this negatively affects the creditor’s relationship with the borrower and significantly burdens his budget.
Object of Interest
The Office of Competition and Consumer Protection became interested in the interest rate issue, which in January 2015 initiated proceedings aimed at explaining by the banks of the existing situation which offered mortgage loans in francs. These studies showed that LIBOR negative quotations were not taken into account, which meant that installments remained at the same level.
In many cases, consumers are not able to negotiate contract terms. They can sign it, agree to its terms or reject it in its entirety. This can cause banks or other companies to impose unfavorable clauses. As the Civil Code states – provisions not agreed with the consumer individually are not binding on him. Especially when they shape his rights and obligations in a way that violates his interests or when they are contrary to decency. Do you think your loan agreement contains illegal entries? Do not wait and contact us today! You can also find more on this topic in our latest guide “Debt relief – effective ways to get out of debt”