CJEU C-520/21: Banks will have to pay customers, not customers paying banks

Piotr Kłodziński|
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It is banks that will have to pay interest and compensation, not customers to banks.

Today's judgment of the Court of Justice of the European Union (CJEU) on Swiss franc loans brings important decisions for thousands of consumers who struggle with problems related to this form of financing. While considering preliminary questions submitted by a Polish court to the European Court of Justice in a case registered under reference number C-520/21, the CJEU determined that the consumer has the right to demand compensation from the bank exceeding the reimbursement of monthly installments and costs of contract performance. Moreover, the credit institution has no right to demand from the consumer any compensation exceeding the returned capital.

The CJEU's decision is an important achievement for people with loans indexed to the Swiss franc, who have been struggling with the unfavorable consequences of fluctuations in the exchange rate of this currency for a long time. The financial crisis caused by excessive lending in foreign currencies in the early 2000s caused the value of the Swiss franc to increase significantly compared to the Polish zloty, which resulted in an increase in loan installments for customers. Many people took out loans in good faith, not realizing the risk associated with this form of financing.

The CJEU judgment now puts banks in a position where they must be responsible for improperly informing consumers about the risks associated with Swiss franc loans. Credit institutions will not be able to demand interest or other compensation that exceeds the returned capital. This means that customers who have so far repaid more than the borrowed capital will be able to demand a refund of the overpayment with interest.

The CJEU's decision gives consumers the certainty that they are entitled to compensation that goes beyond a simple return of capital, this may include interest, but many of them will probably be able to demonstrate more far-reaching damages (this is a classic civil case, and of course we invite you to us). Many customers have experienced great financial difficulties due to the increase in loan installments, and now they will have the opportunity to receive some compensation for their losses. However, it is worth noting that each case will be considered individually, taking into account the circumstances of a specific loan agreement.

As of today, over 90% of this type of Swiss franc cases are considered positively by Polish courts. And although we do not handle strictly Swiss franc cases directly in our office, we will be happy to point you to law firms that conduct such proceedings, and we will assist you in seeking additional compensation from the bank in civil proceedings - if this is justified in your case.

Link to the CJEU judgment: https://klodzinskikancelaria.pl/tsue-c-520-21/

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