Litigation department

Swiss franc credits – Abusive clauses

An abusive clause is also referred to as a prohibited contract clause. It is a provision of a contract that shapes the position of the consumer in a way that is contrary to good practice and thereby flagrantly violates the interests of the consumer. It is common knowledge that such clauses do appear in all types of contracts – including the credit contracts concluded with banks.

The primary examples of the above are the Swiss franc credit contracts. It is common practice that banks include in contracts provisions that entitle them to apply currency exchange rates as per their own charts. This may result in significant loss at the credited party’s end.

Including such provision in a contract has been recognized as the aforementioned abusive clause and, as such, it has been officially recorded in the Register of Prohibited Clauses maintained by the Office of Competition and Consumer Protection. Since that moment, all banks have been obliged to refrain themselves from including in contracts provisions on applying currency exchange rates as per their own conversion rates. The foregoing results in deeming such provisions null and void – the credited party is not obliged to abide by them, however the remaining provisions of the contract remain in force.

In case a bank is found to be partaking in such practice, which is still quite common – regardless of the foregoing restrictions, the credited party may refer to the practice being held prohibited and thereby, for example, assert claims for damages.

CGO Legal law firm specializes in representing Clients who intend to assert claims related to Swiss franc credit contracts including abusive clauses. We provide services in individual cases as well as class actions.

Should you be interested in more detailed information please do contact us.

Click HERE if you want to learn more about Swiss franc credit agreements.