New Court Success as Multi-Currency Mortgage Overturned. Declared Null and Void. Bank Forced to Return the Overpaid Money.

In today’s article, we want to discuss a new judicial success for our law firm, where the nullification of a multi-currency mortgage in Japanese Yen was obtained from the competent court. This ruling relates to a mortgage loan, sold by Banco Popular (now Banco Santander) to our clients.

The Case as Argued

Our clients worked for an airline. It is well-known that Banco Popular offered these multi-currency loans, mainly in Swiss Francs and Japanese Yen, and recommended them as a suitable product to reduce interest for their clients.

We established that the bank carried out customer campaigns targeting pilots, air traffic controllers, SEPLA affiliates, and, in general, employees of airlines.

However, the bank failed to inform them about the significant risks of this type of product. The fluctuation of foreign currencies can lead to:

• Customers owing more than the original loan despite years of payments, when considering the equivalent in euros of the outstanding amount.
• Monthly loan installments, in euros, constantly increasing.

The Decision of the Special Court Number 25 of Valencia

The Special Court of Valencia agreed with our claim, and this court decision can be checked by clicking here.

Consequently, the clause for expenses, delayed interest, etc., has been declared void, and the multi-currency clause (foreign currency) has been canceled.

The reasons for this decision, as outlined by our law firm in our legal claim, are:

• Multi-currency mortgage loans, denominated in foreign currency, are complex and not subject to MIFID regulations.
• The bank did NOT offer sufficient information on the product mechanism.
• The bank did NOT provide enough information about the risks regarding the fluctuation of the equivalent in euros of the outstanding capital and the monthly installments.

Consequences for Our Client

The ruling declared null and void the multi-currency clauses related to foreign currencies. The court ordered the bank to recalculate the mortgage loan into euros and adjust the monthly installments accordingly.

As a result, the bank must return the overpaid money to our client, plus interest.

Additionally, the court ruled that the bank must cover the court costs. This means the bank is required to compensate our client for the lawyer and procurator fees.

Conclusion

If you are affected by a mortgage (loan) or bank product with abusive clauses, including expense, floor, or multi-currency clauses, and you wish to request the cancellation or nullification of a multi-currency mortgage in Japanese Yen, Swiss Francs, etc., please contact us for advice on banking law.