- The process is free for the consumer and the entities will have three months to resolve the claims
- Payment will be in cash, although the client and the entity may agree on other formulas, such as the novation of the mortgage
- A monitoring commission will monitor the process with special protection for the most vulnerable people
The Council of Ministers has approved a Royal Decree Law (RDL) of urgent measures to protect consumers in relation to undue floor clauses. It establishes an out-of-court channel to resolve consumer complaints arising from the latest court decisions in a simple, fast and free way. The procedure will be mandatory for the financial institution when requested by the client and it will have three months to reach an agreement and resolve claims. Although the judicial route is always open, it is about avoiding the collapse of the courts and allowing the entire process to be carried out with due guarantees for the consumer.
The Court of Justice of the European Union ruled on December 21 that the restitution of unfair land clauses must take place from the date of the signing of the mortgage contract. With this decision, the EU Court clarified that the economic effects of the Supreme Court ruling of May 9, 2013 on this same matter are not limited to this last date, but to the entire life of the mortgage. The Government then took the decision to establish an extrajudicial procedure to facilitate the processing of claims that may arise from the judgment of the European Court and guarantee adequate consumer protection.
The RDL approved today establishes consequently a claim mechanism prior to the filing of lawsuits, voluntary for the consumer affected by floor clauses. For credit institutions, it is mandatory to implement, within a maximum period of one month, the necessary measures to comply with the procedure. Furthermore, they must guarantee that this system is known to all consumers with floor clauses in their contracts.
The consumer can direct a claim to his credit institution. Once the claim is received, the entity must send the consumer the calculation of the amount to be returned, including interest or, alternatively, the reasons why it considers that the claim is not appropriate. After receiving the communication, the consumer must state whether they agree with the calculation and, if so, the entity will return the cash. The entire process will be done within a maximum period of three months.
Alternatively, the consumer and the entity may agree on compensatory measures other than the cash return, such as the novation of the mortgage conditions. In this case, the acceptance by the client will be handwritten, after having been duly informed of the economic value of the alternative measure.
The consumer can decide directly through the courts, but once the out-of-court proceeding has started and until this has been resolved, the parties will not be able to exercise any alternative judicial or out-of-court action in relation to the same claim. The possibility is also established that, in the lawsuits that are already in progress at the entry into force of this rule, the parties, by mutual agreement, may request the suspension of these to undergo the extrajudicial process.
In the case of judicial costs, mechanisms are established in the royal decree-law that encourage the entity to resolve adequately and in good faith. On the one hand, if the consumer sues the entity after failing to reach an agreement on the out-of-court claim and the sentence he obtains is economically more favorable for him, the entity will be ordered to pay the costs. On the other hand, if the consumer goes to court directly without using the previous claim and the credit institution is fully acquiesced before the process of answering the demand, the entity will not be ordered to pay the costs.
The extrajudicial claim procedure will be free of charge. A substantial reduction is also foreseen in the notary and registry fees derived from the novations of contracts that may result from the adoption of compensatory measures other than the return of cash.
Regarding the tax treatment of the amounts received, the Personal Income Tax Law is amended so that, in the case of refund of amounts unduly charged by floor clauses, either in application of the preliminary ruling, derived from any agreement with financial entities or the compliance with judgments or arbitration awards, guarantee fiscal neutrality for the consumer.
The Government is empowered to regulate the establishment of a body for monitoring, control and evaluation of claims made within the scope of application of this royal decree-law. In this case, consumers and lawyers will be present in any case and will issue a semi-annual report. This body will ensure that entities comply with their reporting obligations, especially with respect to vulnerable people.