Supreme Court Decides What Makes a Loan UnfairBackground to the Case

loan-debt

Although the particular case under appeal was not truly a case involving a loan , but rather an example of a consumer credit that could have been arranged over the phone, such that loans are transferred to the borrower’s bank account or by using a card issued by the financial institution, the law was held to apply and, in particular, Article 1 since Article 9 states : ” the provisions of this Act shall apply to an operation substantially equivalent to a loan of money , whatever form the contract may take, and the guarantee of compliance upon which basis the loan has been offered.

The flexibility of the rules contained in the Repression of Usury  Act 1908 has allowed the jurisprudence in this area to adapt the application of that law to new and diverse social and economic circumstances. In the case under appeal , those rules had to be applied to a credit transaction which , by by it’s nature , can be considered to lie within the ambit of ​​consumer credit.

The Civil Chamber of the Supreme Court in its judgment of 25th November 2015 considered that the judgment appealed from the  lower court infringed Article 1 of the Law of Repression of Usury in that the credit agreement must  be considered usurious , as were present the two mentioned legal requirements.

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