What can a francophone do to get better credit terms?
At one time, loans in francs were an extremely popular banking product. Customers were attracted primarily by the low installments of this financial obligation. After time, however, it turned out that this type of loan is not without disadvantages. A sudden jump in the exchange rate of the Swiss currency forced borrowers to pay higher installments, which, of course, triggered an avalanche of dissatisfaction among bank customers. Some of them felt cheated, since the currency converter used by the lenders was based on internal exchange rate tables. Thus began the battle between francophiles and banks, which continues to this day. Although some time ago it seemed that customers had little chance in this clash, reality has shown that they can nevertheless fight for justice. In what way? What can be obtained? We give you a hint!
To start with some figures – it is estimated that Poles have taken out nearly 900,000 loans in Swiss francs. In 2008 alone (in the midst of the global economic crisis) they were granted as many as 750 a day nationwide. Thus, it can be said that this kind of loans were handed out right and left. Compared to today’s market situation, it was much easier to obtain a loan (primarily for the purchase of an apartment).
The problem with loans in francs began when the exchange rate of the Swiss currency began to rise sharply. At the time of the greatest popularity of this banking product, you had to pay about PLN 2.20 for 1 CHF. In 2015, however, the price jumped above 4 zlotys, and this was tantamount to a significant increase in monthly installments for most franc holders. In theory, everyone was aware of this danger. However, some of them felt cheated. Why?
Abusive clauses a bone of contention
It’s all due to so-called abusive clauses. In the simplest terms, these are such provisions in a contract that have not been discussed with the customer/consumer, and shape his rights and obligations in a way that is contrary to good morals and grossly violates his interests. In the case of franking agreements, the banks’ practice of converting exchange rates according to internal pricing tables can be considered such clauses. As can be guessed, these calculations were in most cases unfavorable to customers. The borrowers themselves were not informed of this fact, hence they considered the sudden and abrupt increase in installments illegal.
The CJEU ruling has given hope
For several years, however, the aggrieved frankovichs were left on their own. Despite promises from those in power, they did not live to see adequate legal regulations that would allow them to fight for their rights more easily. Everything changed with the 2019 judgment of the Court of Justice of the European Union (CJEU), which obliged Polish courts to deal with claims of irregularities in loan agreements. It became clear that Polish borrowers with an unfavorable commitment in Swiss francs have full proof before the court that the conversion rates practiced by the banks hit the interests of the consumer and are simply illegal. The CJEU verdict was a blow to the banks, and it became clear that aggrieved customers will become more willing to take legal action to fight for their rights.
Who can count on help?
If you plan to start a fight for more favorable credit terms, you should first of all check whether you count yourself among the group of aggrieved francophiles. Law firms handling this type of case emphasize that their assistance applies primarily to those who have a liability indexed or denominated to a foreign currency. Here it is important that such loans had to be borrowed in zlotys, with the capital then converted into francs according to the bank’s exchange rate tables, and the loan itself paid out in Polish currency. Meeting this condition is a must. In addition, it is essential to analyze the contract to find abusive clauses in it. If the contract between the bank and the customer does not contain such clauses, then even in the case of a sudden increase in installments, there is no hope of obtaining more lenient loan terms.
What can be gained?
In fact, a great deal. Depending on the individual situation of each customer, it is even possible to annul the entire loan agreement, although usually only abusive clauses are annulled. In both cases, however, this involves obtaining much more favorable (from a financial point of view) credit terms. Here, however, it is worth remembering that the further loan then continues at the old (favorable terms) interest rate, but the amount is significantly lower.
What to do or fight for your rights?
In the first place, you should go to a trusted lawyer who has experience in handling franking credit cases. It’s important to entrust your case to a specialist with adequate knowledge of how such proceedings are handled. The lawyer will also make a thorough analysis of the contract at the outset, which will allow you to determine at the start whether there are chances of winning the case. It will, of course, be necessary to obtain all the documentation that will prove the bank’s unfavorable practices from the customer’s point of view.
Before going to court, it is worth resolving the matter amicably through a settlement. Until recently, this solution was rarely practiced, but nowadays more and more companies prefer (mainly due to time savings and lack of image damage) to mitigate conflicts with their customers. Only at a later stage is it better to take the matter to court.
