CONSUMER LAW |The ECJ on lack of transparency in consumer credit agreements

On 13 February 2025, the EU Court of Justice (ECJ) issued its judgment in case C-472/23 (Lexitor Sp. Z o.o. v. A.B. S.A.), addressing the interpretation of Articles 10(2)(g) and 10(2)(h) of Directive 2008/48/EC on credit agreements for consumers (the Directive). The dispute involved the Polish debt collection agency Lexitor, to which a consumer had assigned rights arising from a credit agreement concluded with the bank A.B. S.A., in order to recover the amounts paid for charges under the agreement. The issue was thus to determine whether the bank had provided the consumer with sufficient and transparent information in accordance with the Directive, specifically concerning the annual percentage rate of charge (APRC) and the total cost of the credit. Notably, under Article 10(2)(g), the credit agreement should include a clear illustration of all costs and charges, including the APRC and any additional fees tied to the use of a credit account, whereas Article 10(2)(h) of the Directive relates to the necessity of providing consumers with information on the total cost of the credit, which should include both fixed and variable charges. In its judgment, the ECJ emphasised that the transparency of the information provided to the consumer is crucial in order to ensure that an informed decision is taken when borrowing money, considering that the APRC and the total cost of the credit are essential elements that must be disclosed in a clear and understandable manner. Accordingly, the ECJ ruled that if a creditor fails to meet these requirements, particularly with regard to the transparency of charges, the consumer may be entitled to seek reimbursement of any charges that have not been properly disclosed, thus reinforcing the consumer protection objectives of the Directive and highlighting that non-compliance with information requirements could lead to a reimbursement obligation on the creditor.

Newsletter n. 104 – February 2025