The Court of Justice of the European Union (CJEU) has ruled this Thursday that it must be guaranteed that consumers with a mortgage referenced to the Reference Index for Mortgage Loans (IRPH), much more expensive than the Euribor, received "sufficient information" when hiring it " about the calculation method and that this information was accessible. The decision leaves it up to the Spanish courts to verify if this is the case when they study the claims.
The court indicates that a 1994 Bank of Spain circular is key when making this evaluation of information transparency. It explains that a negative differential had to be applied to the IRPH to equalize it with the market interest rate. But this was not included in another circular from 1990 where the operation of the index was explained.
This negative differential, which would have made payments cheaper, is something that was not communicated to the consumer in the court case, a Santander mortgage that comes from the Palma de Mallorca court. And neither can an average consumer be required to know it by their own means.
Thus, the national judge will have to verify whether an average consumer could be required to obtain that information himself. To defend itself, Santander maintains that the clause was negotiated individually and that the IRPH is an official and public index and, therefore, accessible to consumers.
The Spanish judges will also have to decide if the mere reference in the deeds to the circular "is sufficient", since it supposes an understanding of the consequences that moves away from the average client. "The ruling is pronounced on the bank's obligation to inform the client of the economic impact of the IRPH in a clear and transparent manner. The banks have hidden behind the fact that all the information was published by the Bank of Spain and in the BOE, finally the The CJUE makes it very clear that it is not enough", pointed out Patricia Suárez, president of the Association of Financial Users (Asufin), who sees the sentence as "devastating against the banks".
The CJEU recalls that it is up to the national judge to rule on a specific clause depending on the case. "The door is now open for thousands of consumers to claim what was abusively charged by the banks if they did not comply with the current regulations regarding transparent marketing," said Irene Becerra, legal director of reclamador.es.
The IRPH is set based on the average rate of the loans in progress but includes the rates and commissions in calculation, so it is usually more expensive than other indices such as the Euribor. Precisely that it includes fees may mean that a double payment was being given for the services.
In recent years, the reference has been the subject of numerous appeals and judgments both by the Spanish courts and by the CJEU, whose verdicts have given rise to different interpretations by national judges regarding its opaque or abusive nature.
