We have already talked in previous articles about what revolving cards are and how to claim. That you can check it on this LINK.
In today’s article we will go deeper into the most relevant issues when dealing with a claim related to revolving cards: time limitation, nullity, lack of transparency and usury.
I have a revolving card: can I make a claim without fearing the expiry of the time limit for bringing an action?
If we start a legal action for the nullity of a clause in the contract, it is understood by the courts that the action is not time-barred. As it is an absolute and full nullity, there is no statute of limitations.
So, what can be alleged to claim the nullity of the revolving card contract?
The nullity of the contract can be derived from the application of a very high interest rate. The nullity can also derive from a lack of transparency in the contract.
But, if we also ask for some money to be paid back, for the action for restitution or reimbursement of the amounts is brought, there is no clear position on whether or not the action is time-barred. That is to say, if I will have all the time to be able to claim or not.
Some rulings of Audiencias Provinciales (Provincial Courts) or Juzgados de Primera Instancia (Courts of first instance) declare that the limitation period for claiming amounts on revolving cards is five years.
The Tribunal Supremo (Spanish Supreme Court) has not yet taken a position on the matter.
In order to interrupt the statute of limitations, it is important to know it has been in communication with the bank by email or letter complaining about the revolving cards.
What is usurious interest?
Usurious interest is defined as interest that is substantially higher than the normal interest rate.
But, applied what does this means in practice, how can I know if the interest on my revolving card is usurious or not?
First: we need to know what normal interest rate is for this type of card. The normal interest that is considered for revolving cards is that an interest rate is published by the Bank of Spain. This is called the Restricted Definition Effective Rate (hereinafter and under the Spanish abbreviation, TEDR).
Second: it will be a usurious interest rate if it is higher than this. The key question here is to know how much higher the interest rate must be than the normal interest rate in order to know whether it is usurious or not. Some authors set it at two points. This is a question open to interpretation, although the Supreme Court has established some criteria.
The TEDR interest rate is published from 2010 onwards. What happens if my revolving card contract is prior to this date?
The Tribunal Supremo in its 2020 ruling did not indicate which rates should be compared with those cards contracted before June 2010 in order to know whether the applicable rate is usurious or not. Currently, the criteria of the Provincial Courts differ in terms of whether or not usury can be considered in these loans. This leads to greater legal uncertainty for users and consumers.
We have tried to condense and explain complex and delicate information. If your case is also related to revolving cards, at White and Baos we offer a detailed and personalised study of your case, in order to know the best strategy to claim and how to do it. Contact us.
The information provided in this article is not intended as legal advice, but simply conveys information related to legal issues.
Carlos Baos (Lawyer)
White & Baos.
Tel: +34 966 426 185
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