Claims against banks
Revolving cards, unfair terms, mortgage set-up costs and default interest. If you suspect the bank has overcharged you, the first step is not to claim: it is to read the contract. We will go through it with you at our office in Mataró, with no obligation to instruct us.
What they charge you isn't always legal
Cards signed up for in five minutes at a shopping-centre till, quick loans granted over the phone, mortgages from fifteen years ago where every set-up cost fell on the borrower. Behind these cases there are two distinct legal routes, and they are worth keeping apart.
The first is usury: the Spanish Usury Act of 23 July 1908 renders void any loan bearing interest that is notably higher than the normal cost of money and manifestly disproportionate to the circumstances. The second is consumer law (Act 7/1998 on standard contract terms and article 82 of the consolidated Consumer Protection Act), which allows a non-negotiated term to be declared unfair where it creates a significant imbalance contrary to good faith.
The difference matters. Under the usury route the contract is void as to interest and, as a rule, only the capital actually received has to be repaid. Where a term is declared unfair, that term is treated as never having existed and whatever was charged under it must be refunded, while the rest of the contract remains in force.
Sometimes the review ends in a "no": the contract holds up, or what could be recovered would not cover the cost of the proceedings. We will tell you that straight. And where there is a case, the outcome is for the court to decide, not for us.
The most common cases
- Revolving cards and credit. Low instalment, high APR and a balance that never comes down.
- Quick loans and micro-credit. A total cost well above that of an ordinary personal loan.
- Mortgages. Floor clauses, set-up costs, arrangement fee, default interest, acceleration clauses and IRPH.
- Account charges. Overdraft fees and automatic charges for chasing an overdue balance.
- Credit blacklists. Being listed as a defaulter over a debt that is in dispute.
How a revolving card actually works
What defines it is that the credit limit rebuilds itself: every amount you repay becomes available to spend again. The other feature is the instalment, often a low monthly figure. That is the selling point, and it is also where the problem starts.
The instalment is applied in this order: first the interest accrued, then the fees and, if one was taken out, the premium on the associated insurance. Only what is left over reduces the capital. With a high rate and a low instalment, the share that actually reduces the debt is tiny; and if you keep using the card, each new withdrawal refills the limit you had just freed up. The result: years of paying every month with a balance much like the one you started with.
To know whether that cost can be challenged you have to look at the APR, not the instalment or the nominal rate: it takes in interest, fees and the timing of payments, and it is the only figure that can be compared across products.
This is where the Supreme Court's test comes in: there is no fixed percentage above which a card automatically becomes usurious. Judgment STS 258/2023 of 15 February made clear that the contract rate must be compared with the average rate published by the Bank of Spain for that specific type of credit, not with the rate for personal loans generally, and with the figure in force when the contract was signed. There is usury only where the margin above that average is notably higher; later case law has put it in the region of six percentage points, but it is no arithmetic rule. That is why the same APR may be challengeable under one contract and not under another signed years later.
Alongside usury there is a second route, transparency: if the pre-contract information did not allow you to grasp the real financial burden of the revolving system, the interest term can be reviewed on that ground. We go through it on the blog, in Do you have a revolving credit card? Here's how to claim.
The ones most argued over in court
The fact that a term has been struck down in other contracts does not mean yours will be: it depends on how it is drafted and on the information you were given.
Floor clause
Sets a minimum rate so the instalment cannot fall even when Euribor does. The Court of Justice of the EU (21-12-2016, C-154/15) held that where the term fails the transparency test, everything overcharged must be refunded from the outset.
Mortgage set-up costs
Notary, land registry, conveyancing agency and valuation. The Supreme Court in 2019 and the CJEU in 2020 allocated them: agency fees and registry to the bank, notary split in half. Valuation costs on pre-2019 loans were assigned to the bank by the Supreme Court in 2021.
Arrangement fee
Neither automatically valid nor automatically unfair. The CJEU (16-3-2023, C-565/21) rejected the idea that it escapes judicial review simply because it forms part of the price: its transparency and the service it pays for must be examined case by case.
Default interest
The surcharge applied when an instalment goes unpaid. In 2015 the Supreme Court held, for personal loans, that it is unfair where it exceeds the agreed borrowing rate by more than two points, and in 2016 extended that test to mortgages.
Acceleration clause
It allowed the whole loan to be called in after only a few missed instalments. The CJEU and the Supreme Court both ruled on it in 2019. For current contracts the thresholds are set by article 24 of Act 5/2019 on real estate credit.
IRPH
This is an official index: the argument is not whether it is lawful but whether it was properly explained. The CJEU has returned to it in 2020, 2023 and 2024, and the question is still being litigated in the Spanish courts, with decisions going both ways.
From the contract to the court, step by step
Before court there are two doors worth knocking on, and both are free.
Review of the contract
We go through the contract, the settlements, the statements and the receipts, and compare the rate applied with the reference figure in force when you signed. That tells us whether there is a case.
The bank's customer service unit
Every bank must have one and, as a rule, it has to be exhausted before going to the Bank of Spain. The reply is due within one month if you are a consumer and two if you are not.
Bank of Spain
If there is no reply or it doesn't satisfy you, a complaint can be filed with its claims service. It is free, but its findings are not binding on the bank.
Court proceedings
A claim for a declaration of nullity and repayment before the court of first instance. That is where it is decided, and the door to a settlement stays open throughout.
On time limits: the action to have a term declared unfair does not become time-barred. The claim to recover the money can, and the CJEU has made clear that the period cannot start to run before the consumer was in a position to know that the term was unfair. This is a fast-moving area, so it is not one to leave sitting.
I can't find the contract or the statements
It comes up often, and it is almost never a reason to do nothing. The paperwork can usually be recovered.
- Ask the bank for a copy of the contract and your transaction history by exercising the right of access under article 15 of the General Data Protection Regulation, in writing and on the record.
- Check who appears as lender on the receipts: many cards taken out in shops or car dealerships belong to a finance company, not to the bank you pay.
- Keep monthly statements, text messages and settlement emails: they often make it possible to reconstruct what was paid even without the original contract.
- Businesses must keep their trading records for six years (article 30 of the Commercial Code). With very old contracts it takes longer, but it is still worth asking.
- And if there is no way of obtaining them, disclosure of the documents can be sought within the proceedings.
What we will not promise you
The internet is full of advertising for claims against banks quoting specific amounts and success rates. We won't do that: it wouldn't be true, because the outcome depends on the contract, the date and the court's view, and professional conduct rules forbid it. The General Statute of the Spanish Legal Profession prohibits lawyers from promising results that do not depend exclusively on their own work.
- We won't tell you the case is won before we have read the whole contract.
- We won't give you a figure over the phone: the calculations are done with the statements in front of us.
- We won't hide from you that some issues attract conflicting decisions, IRPH being the clearest example.
- We won't encourage you to claim if the numbers don't add up.
If we think there is no case, we will say so and explain why. We would rather lose the instruction than put you into proceedings that don't suit you.
Questions about claiming against a bank
What is a "revolving" card and why doesn't the debt go down?
It is a credit line whose limit rebuilds itself as you repay it. The instalment goes first to interest and fees, and only what is left over reduces the capital: with a high rate and a low instalment, the actual debt barely moves.
Is there a rate above which the interest becomes unfair?
No. Under judgment STS 258/2023 of 15 February, the rate must be compared with the average rate published by the Bank of Spain for that specific type of credit and in force when the contract was signed. There is usury only where the margin is notably higher.
What can be claimed if the case succeeds?
It depends on the route. Under usury the contract is void as to interest and, as a rule, only the capital received has to be repaid. Where a term is declared unfair, it is treated as never having existed and whatever was charged under it must be refunded.
What documents do I need to start?
The card, loan or mortgage contract, the statements or settlements and the receipts. If you can't find them, we help you request them from the bank by exercising the right of access under article 15 of the General Data Protection Regulation.
Is there a deadline for challenging an unfair term?
The action to have an unfair term declared void does not become time-barred. The claim to recover the money can, and the CJEU has made clear that the period cannot start to run before the consumer was in a position to know that the term was unfair.
Do I have to complain to the bank before going to court?
The bank's customer service unit is the first formal step and, as a rule, it must be exhausted before going to the Bank of Spain. The bank must reply within one month if you are a consumer and two if you are not. The Bank of Spain's findings are not binding.
How much does it cost and how long does it take?
We set out our fees in writing before starting, once we have reviewed the case; the first consultation carries no obligation to instruct us. Timing depends on whether the bank settles or the case has to go to court, and on the court's workload.
Think you've been overcharged?
Bring us the contract and the statements and we'll take a look. An initial consultation at our Mataró office, with no obligation to instruct us, or write to us through the contact form.