Sentence No. 266/2021 of the Court of First Instance No. 2 of L’Hospitalet de Llobregat dated September 21, 2021, has declared the nullity due to usury of the interests of eight contracts of microloans of P10 Finance (Loan10), contracted between 2016 and 2018, whose interests oscillated between 2,830.78% APR and 24,867.95%.
The normal thing, in those years, was an average interest rate on consumer loans of 8.5% equivalent annual rate (APR), so the judge, applying the law of repression of usury and the criteria of the Court Supreme, understands that there is usury in the applied interest, which entails the nullity of the contract and having to return only the money received without interest.
Loan10 has been operating since the beginning of 2010 in the online credit, as explained on its website. Since 2020 it is part of the Polish Credit Royal group.
Law of repression of usury
Without exception for microcredits
Personal microcredits “do not constitute any segment of personal loans that could objectify a treatment other than the interest rate index for personal loans intended for consumption for less than three years,” according to the basis of the judgment. The judge understands that accepting the defendant’s thesis that microcredits are in themselves a type of credit with a market interest that is justified in a different way by reason of the amount loaned “would be to give a letter precisely to a practice that claims repress themselves with the law of usury, as it is to grant very small amounts of money at an extraordinarily high interest to people who need to borrow that money precisely because of their distressing situation. “The fact of borrowing 90 euros at 24,000% is not understood otherwise if it is not it is needed in a limit state of vital necessity.
The Law of Repression of Usury, of July 23, 1908, which constitutes the instrument to fight this type of behavior, in its article 1 establishes that “any loan contract in which an interest significantly higher than normal is stipulated shall be void. of money and manifestly disproportionate to the circumstances of the case or in such conditions that it results leonine, having reasons to believe that it has been accepted by the borrower because of his distressing situation, of his inexperience or of the limited of his mental faculties “.
All this was reaffirmed by the Supreme Court in its judgment nº 628/2015, of November 25, when saying that for the loan to be considered usurious it is necessary that, in addition to being notably higher than the normal amount of money, the stipulated interest is manifestly disproportionate to the circumstances of the case.
The Supreme Court in its recent ruling nº 149/2020 of March 4 reiterated that: “to determine the reference to be used as normal money interest To make the comparison with the questioned interest in the litigation and to assess whether it is usurious, the average interest rate must be used, at the time of conclusion of the contract, corresponding to the category to which the questioned credit operation corresponds.
In the present case, the plaintiff provides the statistical bulletins of the Bank of Spain, corresponding to the contracting dates and the highest is 8,82% TAE.
For this reason, the agreed interests are considered notably higher than the normal of money and manifestly disproportionate to the circumstances of the case or in such conditions that they are leonine.
The judge’s conclusion
The amount loaned in this case was 1,230 euros, while the amount returned for all concepts was 1,601 euros, for which the nullity of the contract due to usury is declared. This implies the return by P10 Finance of the amount of 371 euros. Likewise, the entity is ordered to pay the costs.
For the plaintiff’s lawyer, David Alfaya from Asesority Abogados, the important thing about the sentence is the nullity for a usury of a microcredit, when this type of usury sentence on a revolving card is more common. In addition to how striking it is to have applied interest to the loan so high of up to 24,000% APR.
Thousands can be affected by interest usury, in similar cases, so it is advisable to inquire to claim interest on microcredits or fast loans for usury.