Nullity of Unfair Terms in Consumer Loans: CJEU 2023 and Collective Actions Spain (2026)

Unfair Terms in Consumer Loans: Overview

Consumer protection against unfair contract terms in loan and credit agreements is one of the most active areas of banking litigation in Spain. Directive 93/13/EEC and CJEU case law have generated a wave of claims covering revolving credit cards, personal loans and linked credit agreements.

Key CJEU Rulings

The CJEU judgment C-520/21 (8 June 2023) clarified that nullity of an abusive late payment rate does not prevent the bank from claiming the ordinary interest rate during default, but the bank cannot claim alternative legal rates (integration prohibited per C-26/13). Consumers are entitled to restitution of all amounts charged above the contractual rate plus Art. 1108 CC interest from each payment date.

Revolving Credit and the Usury Act

The 1908 Usury Act (Ley Azcárate) voids contracts where interest is noticeably above the normal market rate. The Spanish Supreme Court Plenary (4 March 2020) established: revolving credit cards with APR substantially above the Bank of Spain's average rate for that category are usurious. The consumer need only repay the principal drawn, recovering all interest and fees paid.

Key Limitation Periods

• Nullity action: imprescriptible (CJEU C-224/19)
• Restitution action: 5 years from each payment (STS Plenary 11 January 2023)