The Spanish Supreme Court has for the first time recognized the validity of a collective consumer complaint regarding revolving credit cards. The complaint, filed by the Association of Financial Users in Spain (Asufin), concerned practices used by the financial division of the Carrefour retail network in relation to Carrefour Pass cards. The court upheld previous case law classifying some clauses in these contracts as abusive, opening the way for contract annulment and the refund of interest charged to customers. According to estimates by the consumer organization, there could have been up to 1.5 million such cards in circulation in 2019, with total debt reaching 3 billion euros.
Landmark Ruling by the Supreme Court
For the first time in history, the Spanish judiciary has recognized the admissibility and validity of a collective consumer complaint against revolving credit cards. The decision was made following the Supreme Court's review of a cassation appeal filed by the Asufin association.
Allegations of Unfair Contractual Clauses
The dispute concerned contracts related to Carrefour Pass cards, whose clauses regarding the repayment system, interest rates, or contract termination were deemed unclear and potentially abusive. The court recognized the lack of transparency of these financial products.
Potential Scale of Refunds for Customers
The decision opens the possibility of contract annulment and for cardholders to seek a refund of overpaid interest. According to Asufin data, in 2019 there were approximately 1.5 million such cards in circulation, and associated debt could reach 3 billion euros.
Cards Offered in a Binding Manner
The consumer association argued that Carrefour Pass cards were distributed directly at supermarket checkouts, which could impose their choice on customers. This element of coercion and binding to the distribution network was also included in the complaint.
The Spanish Supreme Court (Tribunal Supremo) has issued a landmark ruling, for the first time in history recognizing the validity of a collective consumer complaint against revolving credit cards. The case concerned the practices of the financial subsidiary of the French retail giant, Carrefour, specifically the Carrefour Pass product. The court, reviewing the cassation appeal filed by the Association of Financial Users (Asufin), upheld the case law line qualifying some contractual clauses related to these cards as unfair and non-transparent. The ruling opens the way for the annulment of these contracts and for cardholders to seek a refund of overpaid interest. The Asufin complaint raised a series of allegations against the practices used by Carrefour Bank. These included, among other things, the method of offering cards directly at supermarket checkouts, which could create a situation of coercion or unknowingly binding customers to the product. Furthermore, contractual clauses regulating the level of interest, the repayment system, and the terms for contract termination were challenged. The Supreme Court found that such products, while attractive due to easy access to credit and low installments, often lead to a debt spiral and in many cases contain provisions that violate consumer rights. Revolving cards, also known as revolving credit cards, have been the subject of intense criticism from regulators and consumer organizations across the European Union over the past decade. High, often hidden costs and complex contract terms have led many countries to introduce stricter regulations, and the European Commission has intensified efforts for greater transparency in credit products. According to estimates presented by the Asufin association, in 2019 alone, there could have been up to 1.5 million Carrefour Pass cards in circulation in Spain. The total associated debt was estimated at up to 3 billion euros. „"Estas cantidades (intereses) dependerán de lo que cada uno de los clientes hayan contraído en crédito, que puede llegar a multiplicar por dos o tres el capital dispuesto"” — Asufin Association – warned the organization in a press release. The Supreme Court's ruling, which is not subject to further appeal, gives the green light to begin the process of gathering data from affected customers and organizing mass claims for refunds. The decision by the Spanish Supreme Court sets an important precedent in consumer protection in the financial market. It may encourage other organizations to file similar class action lawsuits not only against Carrefour but also against other issuers of cards with similar characteristics. The ruling strengthens the consumer's position in relation to large financial institutions and emphasizes the latter's obligation to provide full and clear information about all costs and conditions of credit products. This is another step in the long-term process of increasing transparency and fairness in the European financial services market.