Consumer rights regarding the “cláusula suelo” and other abusive mortgage charges

This evening I attended a public meeting in La Laguna, held by the Tenerife Cabildo’s Centro Insular de Calidad y Consumo Responsable (Centre for Quality and Responsible consumerism) in collaboration with the consumer protection organisation ADICAE, to provide information about the recent European Court Judgment which ruled that the “clausula suelo” is abusive and that affected mortgagees are entitled to a full refund of costs, regardless of whether this clause was obscured or not.

The meeting began with a brief explanation of the cláusula suelo (floor clause).  This is a clause imposed by banks in an estimated three million mortgages throughout Spain, whereby the interest rate paid by the customer, although tied to the Euribor (European base rate) is limited from falling below a minimum rate (the floor) even when the base rate falls.  The speaker explained that this became an issue in 2009, when the base rate tumbled following the financial crash.  Bank customers who expected their mortgage interest rate to reduce accordingly found that it did not, and as a result ended up paying far more for their mortgage than they should have.  This clause has now been determined by the courts to be abusive, as well as costs charged to the customer as part of arranging the mortgage.

The speaker detailed the costs that customers are entitled to have refunded and emphasised that a procedure for obtaining refunds is not yet in place, but that the procedure, when one is found, will be universal (available to all those affected), fast, free of charge (with no unnecessary costs for lawyers and other professionals who would view the claims as a business opportunity) and will not require individuals to pursue their own legal action.

Mortgage-related costs that citizens are entitled to have refunded:

  • All extra interest they have paid due to the cláusla suelo;
  • Notary and escritura costs;
  • Land registry costs;
  • Gestoría costs charged by the bank;
  • It was noted that the right to refund of document tax related to the mortgage contract is unclear at present as the courts have not been unanimous on this.

It was also clarified that, in the case where the customer has signed a waiver at the request of the bank that renounces their right to any refund in the event of such a court judgment, for which many banks offered incentives, this document itself is considered abusive and will not affect the citizen’s fundamental constitutional right to have their monies returned.

Since there is as yet no procedure in place for claiming refunds, the advice at present is to just wait, as ADICAE will inform the public as and when there is more information.  They also invited attendees to join their association which has already represented some 15,000 of those affected in a class action against the cláusla suelo.

Unfortunately, the organisers of the meeting had grossly underestimated the interest it would generate and, instead of the two hour meeting with Q&A session advertised, the presentation was cut short after forty minutes so that it could be repeated twice more for the crowds now gathered in the lobby because the room assigned was far too small.  As such, I am sure that many of the points above invite questions and clarification which was not possible this evening.  ADICAE urged anyone wanting more personal advice on the matter to visit their office in Santa Cruz at C/ Juan Rumeu García 28, Office nº.12 on the second floor, on Wednesdays and Fridays between 5pm and 8pm.  They also promised to hold a second meeting for the Q&A session sometime in the next week or two.  I intend to go to this meeting and will gladly ask any questions on behalf of those who request it.

10 thoughts on “Consumer rights regarding the “cláusula suelo” and other abusive mortgage charges

  1. Many Thanks for the comprehensive update on this situation.
    I would hope that the banks would be made to repay without requiring individuals to make a claim since the banks will know exactly which customers were affected. Although somehow I doubt in Tenerife this will be the case.

    1. I agree, that would be ideal, and that is exactly what ADICAE hopes to achieve, since they know that if left to the consumer’s initiative, many just won’t claim. Whatever solution is agreed though, it will apply to the whole of Spain. Tenerife will not be able to do things differently.

  2. I had heard about this clausula suelo matter long ago in 2014 and my dad sent a letter to the bank about it and they made him sign a paper of the bank in which it states that in the following two years they will apply the reduction but we can not do any judical action in those 2 years. Its been six months since the 2 years finished and the hipoteca we are paying currently is without the clausula. But from 2007 and 2014 i want to recover the extra paid. Is it possible

    1. I understand that the refunds will extend to mortgages that were paid off up to four years ago, so it is possible that this could include those where the conditions changed within the last four years. However, this does need proper clarification so I will raise this question at the next meeting. Can you remember whether your cláusula suelo was dropped as part of a remortgage, i.e. a new contract?

      1. Can u provide me an email so i can send you scanned the document. Its not a remortgage. Its says we will take off the ‘clausula minima’. And we currently pay 17508euros. But when the bank director made my dad sign the document he stated that what we reduce is the clausula suelo for two years in which we can not do any legal action. The 2 years expired in august 2016 but we are still paying the hipoteca at the rate of 1758 euros and prior to this it was on 1959-2042 euros (i paid from 2007 till 2014). We still have another 5 years left to finish. I want to claim all the bank has took from us from 2007 till 2014.

          1. Hi KG, sending me the document wouldn’t do much good at this point as I’m still trying to clarify the situation myself. I will certainly ask about your circumstances at the next Q&A meeting, but for specific, personalised advice, I strongly recommend taking advantage of the offer by ADICAE to call into their office in Santa Cruz during the hours specified in my report. If you don’t speak Spanish you’ll need to take a translator with you.

  3. I think you’ve got two different things mixed up here. One is the clausula suelo and the other is the return of costs associated with getting a mortgage. They are completely separate issues and will have different pathways to recovering money.

    1. Thank you for your comment. I have reported the information as it was presented at the Cabildo/ADICAE meeting and am aware that clarification is needed regarding where the mortgage costs issue fits in, which unfortunately I wasn’t able to obtain on the day due to the overcrowding/scheduling problem. However this is top of my list to be clarified at the next meeting and I will update my report accordingly.

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